Although Cartels Can Increase the Profits of Their Members, They

question 22

Multiple Choice

Although cartels can increase the profits of their members, they are often difficult to maintain for extended periods of time because:

• A) consumer pressure often forces cartels to disband.
• B) managers realize that while the cartel increases profits in the short run, profits in the long run will be lower because of cartel activity.
• C) there is an incentive for each member to further increase its profits by cheating on the cartel agreement.
• D) producers may not understand the benefits of maintaining the cartel.

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Definitions:

Long-Term Equipment Lease

A long-term equipment lease is a contractual agreement allowing a business to use equipment for a prolonged period in exchange for regular payments.

Management Training Seminars

Educational sessions focused on improving managerial skills and competencies, often including leadership, communication, and strategic planning topics.

Cost Behavior

The way in which costs change in relation to changes in a company's level of activity, categorized into fixed, variable, and mixed costs.

Cost Items

Specific expenses incurred in the production or delivery of goods and services, including materials, labor, and overhead costs.