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:

Sport Hunting

The practice of hunting wild animals for recreational purposes, often regulated by laws to ensure sustainability and ethical treatment of wildlife.

Non-Native Species

Species living outside their natural range, which have arrived there by human activity, either deliberate or accidental, and can sometimes become invasive.

Urban Sprawl

The spread of city buildings and suburbs into rural areas, often characterized by low-density residential and commercial development, increased reliance on vehicles, and loss of open space.