Under Which of the Following Market Conditions Is It Most

question 200

Multiple Choice

Under which of the following market conditions is it most difficult to maintain a cartel agreement?

• A) There are many firms in the industry and these firms have similar costs.
• B) There are many firms in the industry and these firms have different costs.
• C) There are few firms in the industry and these firms have similar costs.
• D) There are few firms in the industry and these firms have different costs.

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Definitions:

Social Influence

The effect that the words, actions, or mere presence of other people have on our thoughts, feelings, attitudes, or behaviors.

Obedience

A form of social influence where an individual follows the directions of an authority figure or a set of rules, often disregarding their own preferences or moral standings.

Compliance

The act of conforming to a request, rule, or standard.

Group Polarization Effect

The tendency for a group's prevailing opinions to become more extreme following group discussion.