Cartels usually succumb to divisive forces caused by: a. ...

[oliviahorn72]

Cartels usually succumb to divisive forces caused by:
 a. stringent enforcement of a cartel agreement.
 b. the similarity of production costs across member firms.
  c. members cheating by giving secret discounts.
 d. insufficient profits compared to independent operations.

Question 2

Suppose the probability of a near-new car being good is 0.4 while its probability of being a lemon is 0.6 . If risk-neutral consumers are willing to pay 14,000 if the car is in good condition and 8,000 if it is a lemon, a risk averse buyer who knows those probabilities would be willing to pay 10,400 for the car.
  Indicate whether the statement is true or false

[zhanghao]

Answer to Question 1

c

Answer to Question 2

F

[oliviahorn72]

Thanks for the timely response, appreciate it

[peter]

Gracias!