The More Successful a Cartel Is in Raising the Profits

question 45

Multiple Choice

The more successful a cartel is in raising the profits of the firms in the cartel, the:

• A) less likely there will be cheating.
• B) more likely there will be cheating.
• C) more competitive the cartel.
• D) more likely there will be a price war.

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Definitions:

Net Income

The total earnings of a company after subtracting all expenses, taxes, and losses from total revenue.

Gross Profit

The difference between revenue and the cost of goods sold before deducting any selling, administrative, or other expenses.

Periodic Inventory System

An inventory system where inventory levels are updated at specific intervals rather than continuously, often requiring physical counts.

Cost of Goods Sold

Represents the direct costs attributable to the production of the goods sold by a company.