The Key Behavioral Assumption of the Cartel Theory Is That

question 116

Multiple Choice

The key behavioral assumption of the cartel theory is that oligopolists in an industry

• A)try to maximize sales instead of profits.
• B)act as if they are perfect competitors.
• C)act in a manner consistent with there being only one firm in the industry.
• D)try to create a demand for their products by way of advertising.

---

Definitions:

Cash Inflows

The total amount of money being transferred into a business, typically from operating, investing, and financing activities.

Required Rate of Return

The minimum annual percentage earned by an investment that will induce individuals or companies to put money into a particular security or project.

Internal Rate of Return

A financial metric used to estimate the profitability of potential investments, calculated as the discount rate that makes the net present value of all cash flows from a particular project equal to zero.

Cash Flows

The net amount of cash and cash equivalents being transferred into and out of a business.