Cartels Are Relatively Rare Because

question 22

Multiple Choice

Cartels are relatively rare because

• A)they are illegal in some countries, including the United States.
• B)members find it difficult to agree on key decisions.
• C)members frequently have an incentive to cheat on the cartel.
• D)All of the above are correct.

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Definitions:

Arbitrage

The practice of profiting from a price difference between two or more markets, transferring a commodity or financial instrument from a lower-priced market to a higher-priced one.

Inelastic Demand

A situation in economics where the change in the price of a good or service has little to no effect on the quantity demanded by consumers.

Total Revenue

The total amount of money a firm receives by selling goods or services.

Substitutes

Goods or services that can be used in place of each other, offering similar benefits to consumers.