Collusive agreements are typically difficult for businesses to maintain because each firm can increase profits by:
A)producing less than the collusive quantity.
B)producing more than the quantity that maximizes joint profits.
C)charging less than the price that maximizes joint profits.
D)advertising more than will maximize joint profits.

Question

Quizplus · Accepted Answer

Collusive agreements are difficult to maintain because each firm has an incentive to cheat by producing more than the agreed quantity, which can increase their individual profits at the expense of joint profits.

Collusive Agreements Are Typically Difficult for Businesses to Maintain Because