If an Oligopolist Is Part of a Cartel That Is

question 11

Multiple Choice

If an oligopolist is part of a cartel that is collectively producing the monopoly level of output, then that oligopolist has the incentive to increase production with the aim of

• A)increasing prices.
• B)increasing profits for the group of firms as a whole.
• C)increasing profits for itself, regardless of the impact on profits for the group of firms as a whole.
• D)decreasing costs of production.

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Definitions:

Fixed Costs

Fixed costs are business expenses that remain constant regardless of the amount of goods or services produced, such as rent or salaries.

Selling Price

The amount of money for which something is sold to a customer.

Operating Cash Flow

The cash generated by a company's normal business operations, indicating whether a company is able to generate enough positive cash flow to maintain and grow its operations.

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, representing how much of the asset's value has been used up over time.