If Three Firms of Similar Sizes Join to Form a Cartel

question 131

Multiple Choice

If three firms of similar sizes join to form a cartel, then it is most likely that

• A) they will charge a common, higher market price.
• B) they will collectively produce more than before.
• C) all three firms will stop producing.
• D) all three firms will earn zero profits.

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Definitions:

Peripheral Nervous System

The part of the nervous system that consists of the nerves and ganglia outside of the brain and spinal cord.

Sympathetic

Referring to the part of the autonomic nervous system that increases bodily readiness for action during times of stress.

Autonomic

Pertaining to the part of the nervous system that controls involuntary bodily functions such as heartbeat, digestion, and breathing.

Cell Body

Part of the neuron where information from thousands of other neurons is collected and integrated.