When Firms in an Illegal Market Form a Cartel,_____

question 10

Multiple Choice

When firms in an illegal market form a cartel,_____.

• A)they are able to supply higher quality products
• B)it becomes more difficult for police to detect their activities
• C)they are able to increase profits by behaving as a monopolist
• D)they result in a deadweight loss
• E)they rely on goodwill to ensure the stability of the cartel

---

Definitions:

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including materials and labor.

Cost of Goods Manufactured

The total cost incurred by a company to produce goods in a specific period, including materials, labor, and overhead.

Inventory

The raw materials, work-in-progress (WIP), and finished goods that a company holds for the purpose of sale in the ordinary course of business.

Production Budget

A plan showing the number of units that must be produced within a specific period to meet both sales demand and inventory requirements.