The Condition Under Which a Cartel Can Maintain Its Stability

question 85

Multiple Choice

The condition under which a cartel can maintain its stability is that:

• A)the barriers to entry should be relaxed.
• B)an identical product should be produced by the colluding firms.
• C)there should be a large number of firms in the market.
• D)there should be legal barriers to share agreements.
• E)the products of the colluding firms should be highly differentiated.

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Definitions:

Journal Entry

The recording of financial transactions into accounting records, detailing the accounts that are affected and in what way.

Borrow

The act of receiving something of value in exchange for the promise to return it or its equivalent at a later date.

Credit Card Company

A financial institution that issues credit cards, extending credit for consumers to purchase goods and services with the promise of future repayment.

Service Charge

An additional fee charged for services rendered, often seen in the hospitality and banking industries.