In Cases Where a Cartel Controls Access to a Key

question 98

Multiple Choice

In cases where a cartel controls access to a key production input, firms in the cartel:

• A) will always have an incentive to cheat on the agreement as cheating increases profits.
• B) have less incentive to cheat for fear that they will be cut off from the key input.
• C) are typically good at finding ways to access the key input outside the cartel.
• D) will never cheat on the cartel agreement.

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Definitions:

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