A Reason Why It Is Difficult for Producers to Maintain

question 261

Multiple Choice

A reason why it is difficult for producers to maintain a cartel is that:

• A) The elasticity of demand for the cartel's output decreases over time
• B) Producers in the cartel have the economic incentive to cheat
• C) Economic profits discourage other producers from entering the industry
• D) Producers in the cartel have the motivation to lower price but not to raise price

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Definitions:

Customizable Products

Goods that can be modified or tailored according to customer preferences or specific requirements, often to meet unique needs or tastes.

Competitive Strategy

A long-term plan formulated by a company to gain a competitive advantage over its rivals in the industry, focusing on strengths, market positioning, and customer value.

Responsive

The capability of reacting quickly and positively to changes or demands in the environment.

Uncertainty/Responsiveness Map

This map visualizes the relationship between the uncertainty faced by an organization and its ability to respond effectively, aiding in strategic planning.