Each firm in a cartel has an incentive to break its word and produce more than the agreed quantity.

Name: Each firm in a cartel has an incentive to break its word and produce more than the agreed quantity.
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Each firm in a cartel has an incentive to increase its profits by producing more than the agreed upon quantity, even if it means breaking their word and violating the rules of the cartel. This is known as "cheating" on the cartel agreement, and can lead to a breakdown of the cartel as a whole.

Each Firm in a Cartel Has an Incentive to Break