One of the Reasons Cartels Are Considered Unstable Is That

question 121

Multiple Choice

One of the reasons cartels are considered unstable is that

• A)member firms reduce their investment,thereby becoming uncompetitive over time.
• B)it is inefficient to manage individual firms collectively.
• C)there are wide fluctuations in price as cartel members vary their output.
• D)consumers seek out substitutes to the cartel product.
• E)individual members of the cartel have an incentive to violate the cartel agreement.

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Definitions:

Purchase Price

The amount of money paid to acquire a good, service, or asset, often before any discounts or adjustments.

Land Improvements

Enhancements made to a parcel of land to increase its value, such as landscaping, irrigation systems, and roads.

Land

An asset representing the earth's surface, which is not depreciable under accounting rules, but may appreciate in value over time.

Buildings

Physical structures owned by a business, typically used for offices, manufacturing, or storage.