Cartels are difficult to maintain in the long run because A. cartels are illegal in all industrialized countries. B. entry barriers are insignificant in oligopolistic industries. C. it is more profitable for the industry to charge a lower price and produce more output. D. individual members may find it profitable to cheat on agreements.

Question

Business

Nola Walton

22 August, 10:37

Cartels are difficult to maintain in the long run because A. cartels are illegal in all industrialized countries. B. entry barriers are insignificant in oligopolistic industries. C. it is more profitable for the industry to charge a lower price and produce more output. D. individual members may find it profitable to cheat on agreements.

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Answers (1)

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Daphne Baxter · Answer 1

D. individual members may find it profitable to cheat on agreements.

Explanation:

Cartels are a group of independent market contributors that collaborate with each other with the sole aim of growing their profits and establishing full domination in the market. Most times, cartels occur within the same sphere of business, and thus an alliance of rivals. But sometimes, certain members may try to be cunny and cheat another party involved which makes cartels difficult to manage in the long run.