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The European Regulator in November 2008 Fined Car Glass Producers

Question 93

Multiple Choice

The European regulator in November 2008 fined car glass producers Asahi, Pilkington,
Saint- Gobain and Soliver more than 1.3 billion euros ($1.66 billion) for price fixing, the largest sum ever levied by the EU on a cartel. What are the economic justifications for making price fixing illegal?


A) Consumers suffer because of decreased consumer surplus and the outcome is inefficient because of deadweight loss.
B) The cartel increases quantity supplied in the market causing a surplus and therefore harming other producers.
C) The cartel increases quantity supplied in the market causing a shortage.
D) An oligopoly cartel can maximise profit and behave like a natural monopoly.

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