You read that 40 firms that grow and export strawberries to the United States decide to form a cartel. The cartel aims to raise the price of strawberries and reduce output to increase profits for the strawberry growers. You predict that this cartel will probably
A. not be successful because it is difficult to export a perishable product like strawberries.
B. be successful because enforcing the rules among only 40 firms is very manageable.
C. not be successful because there are too many firms that are trying to organize the cartel and there are a number of good substitutes for strawberries.
D. be successful because the demand for strawberries is very inelastic.
Answer: C
Economics
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Labor productivity in the U.S. in the periods 1973-1995 and 1995-2012 grew at average rates of:
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