Cartels Are Difficult to Maintain Because

question 40

Multiple Choice

Cartels are difficult to maintain because:

• A) there are generally few barriers to entry in oligopoly markets.
• B) firms have a strong private incentive to cheat on agreements.
• C) it is difficult to enforce a cartel agreement.
• D) both (b) and (c).

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Definitions:

Investment Project

A planned undertaking aimed at achieving specific financial returns through the allocation of resources to productive activities.

Interest Rate

The proportion of a total amount of money that is levied for borrowing it, usually described as a yearly rate percentage.

Interest Rate

The percentage of the principal charged by the lender for the use of its money, or earned by an investor on an investment.

Loanable Funds

Refers to the supply of capital or funds available for borrowing within an economy.