If Three Firms of Similar Sizes Join to Form a Cartel

question 131

Multiple Choice

If three firms of similar sizes join to form a cartel, then it is most likely that

• A) they will charge a common, higher market price.
• B) they will collectively produce more than before.
• C) all three firms will stop producing.
• D) all three firms will earn zero profits.

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Definitions:

Data Sharing

Data sharing is the practice of making data available to others, often to foster transparency, collaboration, and knowledge exchange.

Effective Size Of A Team

The optimal number of members in a team that enables efficient performance and decision-making without compromising communication and cohesion.

Informal Leadership

Influence and leadership exercised by a person without formal authority, often through personal skills and relationships.

Emergent

Something that arises or appears unexpectedly or in the process of development or evolution.