Asked by
Amanda E Scheib
on Dec 12, 2024
Verified
Which one of the following factors reduces the likelihood that a cartel agreement will lead to higher producer profit?
A) significant barriers to entry into the cartelized market
B) the development of substitutes for the good produced by the cartel
C) government restrictions that limit competition from new rivals
D) a small number of sellers involved in the cartel agreement
Cartel Agreement
A formal, explicit agreement among competing firms to control prices, production, and market shares.
Cartelized Market
A market condition where a few suppliers act together to control prices or limit market competition.
- Recognize the circumstances that facilitate the formation of a cartel and the elements that contribute to its possible breakup.
Verified Answer
LP
Learning Objectives
- Recognize the circumstances that facilitate the formation of a cartel and the elements that contribute to its possible breakup.
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