Firms Operating in a Cartel Have a Large Incentive to Cheat

question 70

Multiple Choice

Firms operating in a cartel have a large incentive to cheat on the agreement by:

• A) lowering prices and increasing production.
• B) lowering both prices and production.
• C) raising prices and increasing production.
• D) raising prices and lowering production.

---

Definitions:

Voting Shares

Company shares that grant the shareholder the right to vote on corporate matters.

Securities Commission

A government agency or body responsible for enforcing securities laws, regulating the securities industry, and protecting investors.

Provincial Agency

A government entity or organization that operates at the provincial level, with specific administrative or regulatory functions.

Duty

A moral or legal obligation; a responsibility or task required by one's position, status, or law.