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Author Question: Why does a collusive agreement to restrict output and raise price create a game like the prisoners' ... (Read 33 times)

viki

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on: Jun 29, 2018
Why does a collusive agreement to restrict output and raise price create a game like the prisoners' dilemma?
 
  What will be an ideal response?

Question 2

List the four main factors of production.
 
  What will be an ideal response?


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komodo7

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Reply #1 on: Jun 29, 2018
Answer to Question 1

Each firm has the possibility of sharing monopoly profits with other members of the cartel if each firm complies with the agreement. But each firm has an incentive to cheat on the collusive agreement in a cartel. If they all cheat, the outcome for each firm is worse than if they had all held to the agreement.

Answer to Question 2

The five main factors of production are labor, capital, natural resources, and entrepreneurial ability.


viki

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Reply 2 on: Jun 29, 2018
Excellent

steff9894

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Reply 3 on: Yesterday
Great answer, keep it coming :)

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