Author Question: Cartels usually succumb to divisive forces caused by: a. stringent enforcement of a cartel ... (Read 51 times)

oliviahorn72 · **on:** Jun 30, 2018

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