All of the following are problems associated with maintaining a cartel except
A)cartels are illegal.
B)a large amount of information is needed to coordinate a cartel.
C)profits are not maximized by a cartel so it will evolve into a monopoly.
D)each member of the cartel has an incentive to "chisel" by expanding output.

Question

Quizplus · Accepted Answer

While cartels have many problems associated with maintaining them, such as the illegality and coordination issues mentioned in A and B, the assertion in C is incorrect. Cartels do aim to maximize profits for their members, although this can be difficult to achieve due to the incentive for each member to cheat and expand production.

All of the Following Are Problems Associated with Maintaining a Cartel