Cartels Often Dissolve Because

question 51

Multiple Choice

Cartels often dissolve because

• A)their members often set a time limit as to how long the cartel should exist.
• B)their members often cheat on the cartel agreements because they have incentive to.
• C)their members often find that they do not earn as high profits from the cartel as they had hoped to.
• D)firms in a cartel face different costs than firms outside a cartel.

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Definitions:

Compounded Semi-annually

The process of calculating interest on both the initial principal and the accumulated interest from previous periods, applied twice a year.

Amortization Period

Refers to the total time taken to pay off a debt in regular installments until the loan amount and interest are paid in full.

Compounded Semi-annually

The method of determining interest by adding it to both the original amount of money deposited or borrowed and the interest that has already been added over two periods within a year.

Amortization

The process of paying off a debt over time through regular payments.