Cartel Members Have an Incentive to Cheat on the Cartel

question 89

Multiple Choice

Cartel members have an incentive to cheat on the cartel because:

• A) the industry profit would be higher under competitive conditions.
• B) the cartel price is the competitive price.
• C) each member's output quota is too high.
• D) each member's MR is not equal to the cartel's MC.

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Definitions:

Vivid

Producing powerful feelings or strong, clear images in the mind.

Non-rapid Eye Movement (NREM)

A period of sleep that encompasses stages 1 through 3, characterized by slower brain waves, decreased body movement, and reduced eye movement.

Circadian Rhythm

A cycle that is connected with the 24-hour period of the Earth’s rotation.