Author Question: Each member of a cartel a. faces a temptation to cheat on the agreement because lowering its price ... (Read 123 times)

nmorano1 · **on:** Jun 30, 2018

Each member of a cartel
a. faces a temptation to cheat on the agreement because lowering its price slightly below the established price will usually increase the firm's sales and profit
b. faces a temptation to cheat on the agreement because raising its price slightly above the established price will usually increase the firm's sales and profit
c. has no temptation to cheat on the agreement because lowering its price slightly below the established price will usually have no impact on the firm's sales and profit
d. has no temptation to cheat on the agreement because raising its price slightly above the established price will usually decrease the firm's sales and profit
e. has no temptation to cheat on the agreement because lowering its price slightly below the established price will usually lower the firm's sales and profit

Question 2

Public choice theory assumes that government makes optimal policies to respond to the shortcomings of private markets.
a. True
b. False