Even Though a Cartel Is Often Profitable for Its Members

question 28

Multiple Choice

Even though a cartel is often profitable for its members, cartel arrangements contain the seeds of their own disintegration because

• A) a price maintained above each cartel member's marginal cost provides each member with an incentive to offer secret price reductions to attract additional customers.
• B) the profits earned by cartel members will induce others to enter the industry.
• C) cartel members will attempt to garner more of the total profit for themselves by cheating on their agreement with other members.
• D) all of the above are correct.

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Definitions:

Political Reality

The practical aspects of politics, acknowledging the dynamics of power, relationships, and the practical limitations within the political sphere.

White House Staff

Employees of the White House Office who directly support and advise the President of the United States, including senior aides, advisors, and support staff.

Independent Authority

An organization or body that operates autonomously from government control, often established to regulate certain activities or uphold standards.

Political Base

The group of voters or supporters that are reliably supportive of a political party or candidate.