Which of the Following Is LEAST Likely to Be an Outcome

question 210

Multiple Choice

Which of the following is LEAST likely to be an outcome of a cartel as compared to the situation before the cartel was formed?

• A) Cartel members charge higher prices.
• B) Cartel members reduce production.
• C) Cartel members make fewer profits.
• D) Cartel members do not compete with each other in pricing decisions.

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Definitions:

Variable Costs

Costs that vary directly with the level of production or output, such as materials and labor.

Fixed Costs

Expenses that do not change in the short term despite variations in production levels or sales volumes, such as rent, salaries, or insurance.

Total Revenue

The overall revenue that originates from a company's core operations, including the sale of its products or services.

Average Fixed Cost

The total fixed costs of production divided by the quantity of output produced, which decreases as production increases.