Economics (MindTap Course List)
13th Edition
ISBN: 9781337617383
Author: Roger A. Arnold
Publisher: Cengage Learning
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Chapter 24.3, Problem 1ST
To determine
Explain the specific incentive to form the cartel and the incentive to cheat on the cartel.
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Chapter 24 Solutions
Economics (MindTap Course List)
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- “Firms have an incentive to form a cartel,but once it is formed,they have anincentive to cheat”Explain the incentives‘to form the cartel’,and‘to cheat after forming the cartel’.arrow_forwardWhy are cartel agreements often not successful? Different firms experience different costs. All parties would make more money if everyone increased production. One party has an incentive to cheat to make more profit?arrow_forwardOPEC is a petroleum cartel, a group of oil producing countries whose objective is to coordinate and unify petroleum policies. What type of market structure is a cartel?arrow_forward
- If south africa increased its production by 1,000 diamonds while russia stuck to the cartel agreement, south africa's profit would Increase or decrease . Why are cartel agreement often not successful? choose on below: a. one party has an incentive to cheat to make more profit. b. different firms experience different cost c. all parties would make more money if everyone increased productionarrow_forwardExplain the contradictory incentives associated with forming and maintaining cartels.arrow_forwardWhat problems usually make cartels collapse? How was OPEC able to avoid this fate, at least through the mid-1980s?arrow_forward
- Why has the OPEC oil cartel succeeded in raising prices substantially while the CIPEC copper cartel has not? What conditions are necessary for successful cartelization?arrow_forwardWhich of the following would be cases of cartels? Check All That Apply Ford Motor Company OPEC Major League Baseball Major League Baseball The restaurant industry DeBeers Microsoftarrow_forwardIs it possible that the violent members of the drug cartels can behave like cartels in legitimate markets?arrow_forward
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