Cartels often dissolve because a. their members often set a time limit as to how long the cartel should exist. b. their members often cheat on the cartel agreements because they have incentive to. c. their members often find that they do not earn as high profits from the cartel as they had hoped to. d. firms in a cartel face different costs than firms outside a cartel. e. none of the above

Question

Business

Nora Nichols

17 November, 17:18

Cartels often dissolve because a. their members often set a time limit as to how long the cartel should exist. b. their members often cheat on the cartel agreements because they have incentive to. c. their members often find that they do not earn as high profits from the cartel as they had hoped to. d. firms in a cartel face different costs than firms outside a cartel. e. none of the above

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Megan Becker · Answer 1

B-Their members often cheat on the cartel agreements because they have incentive to.

Explanation:

Cartels dissolve because there is an incentive to cheat and produce goods by maximizing their own profits as the maximization of profits of cartels doesn't imply the maximization of profits of individual firms.