Why do firms collude to become a cartel? Because it allows them to
A) develop innovations without the threat of competition within the industry
B) compete in order to increase market share
C) act like a monopoly
D) diversify their markets without fear of losing market share
E) increase their own individual concentration ratio

Question

Quizplus · Accepted Answer

Colluding to form a cartel allows firms to act like a monopoly, enabling them to restrict output, raise prices, and increase profits collectively, as they coordinate their actions to avoid the competition that would otherwise drive prices down.

Why Do Firms Collude to Become a Cartel? Because It