If a Cartel Is Unable to Monitor Its Members and Punish

question 56

Multiple Choice

If a cartel is unable to monitor its members and punish those firms that violate the agreement,then

• A) the member firms will each act as price setters.
• B) the cartel will prosper in the long run.
• C) the market will become a monopoly.
• D) the cartel will fail.

---

Definitions:

Null Hypothesis

A hypothesis that there is no significant difference or effect, serving as a default position in hypothesis testing.

Independent Variables

Factors in an experiment that are purposely manipulated to observe their effect on dependent variables.

Durbin-Watson Statistic

A measure used in statistics to detect the presence of autocorrelation in the residuals from a regression analysis.

First-Order Autocorrelation

First-order autocorrelation is a statistical measure indicating the correlation between values in a time series and their immediate predecessors.