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Once a Cartel Establishes Its Profit-Maximizing Price

Question 210

Multiple Choice

Once a cartel establishes its profit-maximizing price:


A) Entry into the industry of new competitors will not affect the cartel's profits
B) Output changes by cartel members have no effect on the market price
C) Each cartel member is tempted to cheat on the cartel price in order to add to its profit
D) All cartel members have a strong incentive to adhere to the agreed-upon price

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