Which of the Following Statements Is TRUE

Multiple Choice

Which of the following statements is TRUE?
I. The gain in profit from cheating on a cartel agreement is greater if there are more firms in the cartel.
II. In a cartel, compliant firms will earn rising profits as cheating firms lower prices by expanding output.
III. If a firm cheats on a cartel agreement, the loss in profit to the compliant firm will be smaller in a two-firm cartel than a four-firm cartel.

A) I, II, and III
B) II
C) I and III
D) III