If an Oligopolist Is Part of a Cartel That Is

question 183

Multiple Choice

If an oligopolist is part of a cartel that is collectively producing the monopoly level of output,then that oligopolist has the incentive to lower production with the aim of

• A) lowering prices.
• B) increasing profits for the group of firms as a whole.
• C) increasing profits for itself, regardless of the impact on profits for the group of firms as a whole.
• D) None of the above is correct.

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Definitions:

Tariffs

Taxes imposed on imported goods and services, intended to raise their price and protect domestic industries.

Trade Barriers

Restrictions imposed by a government on the importation or exportation of goods to protect domestic industries.

Mutual Economic Growth

a situation in which multiple parties or countries experience simultaneous increases in economic development and prosperity through cooperation or beneficial policies.

Favourable Trade And Customs Laws

Legislation and regulations that reduce barriers to trade, such as tariffs and quotas, making it easier for goods and services to move across borders.