A Collusive Agreement to Form a Cartel Is Difficult to Maintain

question 127

Multiple Choice

A collusive agreement to form a cartel is difficult to maintain because

• A) each member firm can increase its own profits by cutting its price and selling more.
• B) forming a cartel is legal but frowned upon throughout the world.
• C) supply will decrease because of the high cartel price.
• D) demanders will rebel once they realize a cartel has been formed.
• E) each firm can increase its profit if it decreases its production even more than the decrease set by the cartel.

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Definitions:

Demographic Segmentation

The division of a market into segments based on demographic factors like age, gender, income, education, or ethnicity to tailor marketing strategies.

"Mini-Ads"

Short, appealing advertisements aimed at capturing audience attention quickly, often used in digital or social media platforms.

Channel Surf

The action of quickly switching between channels on a television to find a desirable program to watch.

Psychographic Segments

Market segmentation based on consumers' lifestyle, interests, opinions, and personality traits, used to create more targeted marketing strategies.