For a cartel to be successful in increasing economic profits for its members:
A) entry of new firms must be blocked.
B) price must be set equal to marginal cost.
C) individual firms must be encouraged to adjust output so as to maximize their own profits at the cartel price.
D) price must be set equal to average total cost.

Question

Quizplus · Accepted Answer

For a cartel to be successful, it must prevent new firms from entering the market to maintain control over prices and output, thereby increasing economic profits for its members.

For a Cartel to Be Successful in Increasing Economic Profits