What Is the Incentive for a Firm to Join a Cartel

question 152

Multiple Choice

What is the incentive for a firm to join a cartel?

• A)to be able to earn profits in the long run but not in the short run
• B)to be able to earn larger profits than if it was not part of the cartel
• C)to completely insulate itself from competition
• D)to produce a larger amount of output than if it was not part of the cartel

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Definitions:

Spot Exchange Rate

The current market price for exchanging one currency for another for immediate delivery.

Forward Exchange Rate

A predetermined price at which a currency transaction will occur at a future date.

Mexican Treasury

Refers to the governmental department responsible for issuing Mexican government securities, including bonds and treasury bills.

Spot Exchange Rate

The current market price for immediate exchange of currencies.