Author Question: A highly profitable cartel arrangement among sellers contains the seeds of its own disintegration ... (Read 96 times)

saliriagwu · **on:** Jun 29, 2018

A highly profitable cartel arrangement among sellers contains the seeds of its own disintegration because

A) a monopoly arrangement is more unstable than an oligopoly arrangement.
B) a price maintained above each cartel member's marginal cost is an incentive to offer secret price reductions to attract additional business.
C) monopoly agreements will, in the long run, reduce net revenue to zero.
D) net revenue for the cartel as a whole could be increased by producing at the level where marginal revenue equals marginal cost for each cartel member.
E) the cartel members will have a strong incentive to reduce quality.

Question 2

Refer to the scenario above. What is the probability of picking a green ball from the box?

A) 12.83
B) 16.67
C) 24.75
D) 32.35