If a Cartel Is Unable to Monitor Its Members and Punish

question 56

Multiple Choice

If a cartel is unable to monitor its members and punish those firms that violate the agreement,then

• A) the member firms will each act as price setters.
• B) the cartel will prosper in the long run.
• C) the market will become a monopoly.
• D) the cartel will fail.

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Definitions:

Retina

A thin layer of tissue located at the back of the eye, containing cells sensitive to light that trigger nerve impulses that pass via the optic nerve to the brain, where a visual image is formed.

Ciliary Body

A structure in the eye that includes the ciliary muscle, which controls the shape of the lens, and the ciliary epithelium, which produces the aqueous humor.

Accommodation

The process by which the eye changes optical power to maintain a clear image (focus) on an object as its distance varies.

Nystagmus

Involuntary, rapid, and repetitive movement of the eyeballs, which can be horizontal, vertical, or rotary.