Even when allowed to collude, firms in an oligopoly may choose to cheat on their agreements with the rest of the cartel. Why?
Individual profits can be increased at the expense of group profits if individuals cheat on the cartel's cooperative agreement.
Economics
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A bank is solvent when:
A) its stockholders' equity exceeds the value of its assets. B) the value of its liabilities exceeds its stockholders' equity. C) the value of its total assets exceeds the value of its liabilities. D) the value of its liabilities exceeds the value of its assets.
Economics
Compared to the short-run price elasticity of demand, the long-run price elasticity of demand is
A) smaller. B) the same. C) greater. D) either greater than or less, depending on the number of substitutes the good has.
Economics