To increase their individual profits, members of a cartel have an incentive to
a. charge a higher price than the other members of the cartel.
b. increase production above the level agreed upon.
c. ignore the choices made by the other firms and act as a monopolist.
d. charge the same price a monopolist would charge.
b
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In general, with a monopolist's outcome, total surplus is:
A. higher than that of a competitive market. B. lower than that of a competitive market. C. the same as that of a competitive market. D. Any of these is possible.
Consider the following payoff matrix facing two criminals. A: ConfessA: Not ConfessB: ConfessA: 20yrs, B: 20yrsA: 50yrs, B: 2yrsB: Not ConfessA: 2yrs, B: 50yrsA: 10yrs, B: 10yrsTheir options are to confess or not to confess. Given this information:
A. A has a dominant strategy but B does not. B. B has a dominant strategy but A does not. C. both A and B have dominant strategies. D. neither A nor B has a dominant strategy.