Why Is It Difficult for Colluding Firms to Maintain a Cartel

question 17

Multiple Choice

Why is it difficult for colluding firms to maintain a cartel?

• A)Because the large profits made by existing firms result in new firms entering the industry.
• B)Because cartels are illegal.
• C)Because cartels always end up producing too little with the result that at least one member firm will find it profitable to raise its price and the other firms will follow.
• D)Because member firms find the prospect of cheating too attractive to resist.

Grasp the concept and application of Pareto analysis in problem-solving.

Appreciate the various approaches to management including systems theory, the behavioral approach, and the contingency approach.

Comprehend the perspectives on organizations as systems and the importance of adaptability and learning.

Recognize the importance of rigor and science in management practices over quick-fix solutions and best-seller management trends.

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Definitions:

Memory Slips

Occasional lapses or brief failures in memory recall, experienced as forgetting names, appointments, or where items were placed, commonly due to factors like stress or aging.

Alzheimer's Disease

A progressive neurodegenerative disorder characterized by memory loss, cognitive decline, and personality changes.

Avoid Confrontation

means to deliberately steer clear of situations or discussions that could lead to disputes or conflicts.

Interpersonal Problems

Issues or conflicts arising in interactions between individuals, affecting communication and relationships.