The Condition Under Which a Cartel Can Maintain Its Stability

question 85

Multiple Choice

The condition under which a cartel can maintain its stability is that:

• A)the barriers to entry should be relaxed.
• B)an identical product should be produced by the colluding firms.
• C)there should be a large number of firms in the market.
• D)there should be legal barriers to share agreements.
• E)the products of the colluding firms should be highly differentiated.

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Definitions:

Lex Talionis

A principle of retributive justice meaning "the law of retaliation", where the punishment corresponds directly to the offense, as in "an eye for an eye".

Theory of Punishment

A set of principles that aim to justify and guide the imposition of penalties on individuals who violate laws, focusing on deterrence, retribution, rehabilitation, and restoration.

Retribution

A principle of justice that prescribes punishment for an offense should be proportionate to the severity of the crime committed.

Retributivist

A theory of punishment that justifies penalizing wrongdoers on the basis that they deserve punishment commensurate with the harm they have caused.