A Reason Why It Is Difficult for Developing Countries to Maintain

question 21

Multiple Choice

A reason why it is difficult for developing countries to maintain a cartel is that

• A) the elasticity of demand for a cartel's output decreases over time.
• B) producers in the cartel have an economic incentive to cheat.
• C) economic profits discourage other producers from entering the industry.
• D) producers in the cartel have the motivation to lower prices but not to raise prices.
• E) tariffs allow producers in the cartel to produce items that make no profit.

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Definitions:

Common-Interest Association

An organization formed by people who share a common interest or goal, often to advance a specific cause or interest group.

Hawaiian System

In kinship terminology, a system in which all relatives of the same sex and generation are referred to by the same kin term; also known as the generational system.

Unilineal Descent System

A system of kinship tracing descent exclusively through either the male or female line, but not both.

Descent System

A way of tracing kinship and inheritance through either the maternal or paternal line.