Suppose an Oil Cartel Has an Agreement to Restrict Members

question 74

Multiple Choice

Suppose an oil cartel has an agreement to restrict members' production in order to maintain a price of $40 per barrel. A single cartel member may want to cheat and exceed its quota so that it can:

• A) reduce its costs.
• B) charge higher prices.
• C) make demand more inelastic.
• D) earn a bigger profit.

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