The Table Below Shows the Payoff (Profit) Matrix of Firm

question 96

Multiple Choice

The table below shows the payoff (profit) matrix of Firm A and Firm B indicating the profit outcome that corresponds to each firm's pricing strategy (where $500 and $200 are the pricing strategies of two firms) .Table 12.2

-In order to survive, cartels must be able to enforce contracts. However, when a cartel is trading in an illegal commodity:

• A)it can use the judicial system to enforce contracts.
• B)it relies on altruism of members to enforce contracts.
• C)it is inherently stable because the market is underground.
• D)violence becomes a means of contract enforcement.
• E)authorities are effective in preventing the trade.

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