One Factor That Has Prevented the Formation of Cartels for Producers

question 209

Multiple Choice

One factor that has prevented the formation of cartels for producers of commodities is that:

• A) The demand for commodities tends to be price inelastic
• B) Substitute products exist for many commodities
• C) Commodity produces have been able to dominate world markets
• D) Production of most commodities is capital intensive

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Definitions:

Break-even Point

The level of production or sales at which the revenues of a business equal its costs, resulting in neither profit nor loss.

Total Contribution Margin

This refers to the total amount of revenue left over after deducting all variable costs, indicating the total contribution towards covering fixed costs and generating profit.

Break-even Point

The point at which total revenue equals total costs, resulting in no profit or loss for the business.

Sales Mix

The combination of different products or services that a company sells, which impacts the overall profitability.