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Author Question: Collusion makes firms better off because if they act as a single entity (a cartel) they can reduce ... (Read 355 times)

Arii_bell

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on: Oct 8, 2019

Collusion makes firms better off because if they act as a single entity (a cartel) they can reduce output and increase their prices and profits. But some cartels have failed and others are unstable. Which of the following is a reason why cartels often break down?


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Each member of a cartel has an incentive to "cheat" on the collusive agreement by producing more than its share when everyone else sticks with the collusive agreement.


◦

Most cartels do not have a dominant strategy.


◦

Members of a cartel may resent having to share their profits equally.


◦

When a cartel is profitable the amount of competition it faces increases.

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Marked as best answer by Arii_bell on Oct 8, 2019

dajones82

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Reply #1 on: Oct 8, 2019
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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Arii_bell

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Reply 2 on: Oct 8, 2019
Great answer, keep it coming :)

elyse44

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Reply 3 on: Yesterday
Excellent

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