A reason why it is difficult for producers to maintain a cartel is that
A) the elasticity of demand for the cartel's output decreases over time.
B) producers in the cartel have the economic incentive to cheat.
C) economic profits discourage other producers from entering the industry.
D) producers in the cartel have the motivation to lower price but not to raise price.

Question

Quizplus · Accepted Answer

Producers in a cartel have the economic incentive to cheat by increasing their own production in order to capture a larger share of the market and earn greater profits. This can lead to the breakdown of the cartel and a return to competitive pricing.

A Reason Why It Is Difficult for Producers to Maintain