Explain Why Member Firms of a Cartel Like OPEC Have

question 67

Essay

Explain why member firms of a cartel like OPEC have incentives to agree to a low cartel production level and then produce more than its quota.

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Definitions:

Enumerated Powers

Specific powers granted to Congress by the United States Constitution.

Police Powers

The ability of states to control actions and maintain peace within their borders to improve the health, safety, ethics, and overall well-being of their residents.

Full Faith

A phrase typically used in legal contexts to denote the obligation of trust and honesty in the enforcement of laws or agreements.

Credit Clause

This term does not directly correspond to a widely recognized legal or constitutional provision as described, but it might be confused with the Full Faith and Credit Clause, which requires states to respect the public acts, records, and judicial proceedings of other states.