A Reason Why It Is Difficult for Developing Countries to Maintain

Multiple Choice

A reason why it is difficult for developing countries to maintain a cartel is that

A) the elasticity of demand for a cartel's output decreases over time.
B) producers in the cartel have an economic incentive to cheat.
C) economic profits discourage other producers from entering the industry.
D) producers in the cartel have the motivation to lower prices but not to raise prices.
E) tariffs allow producers in the cartel to produce items that make no profit.