Cartels Are Typically Subject to Cheating by Their Members Because

question 227

Multiple Choice

Cartels are typically subject to cheating by their members because

• A) if the other firms stick to the agreement, a firm can increase its profits by cutting its price.
• B) barriers to entry do not exist so new entrants will join.
• C) the U.S. Justice Department will punish any cartel agreement before the cartel has had a chance to operate.
• D) product differentiation allows the firms in the cartel to cheat.

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Definitions:

Marketing Channel System

A network of interdependent organizations involved in the process of making a product or service available for use or consumption by the consumer or business user.

Marketers

Professionals responsible for identifying customer needs and directing the flow of goods and services from producers to consumers.

Technologies

The application of scientific knowledge for practical purposes, especially in industry, where it involves the design and creation of tools, machines, systems, or processes.

Intangible Benefits

Advantages derived from a product or service that cannot be physically touched or quantified, such as customer service quality or brand reputation.