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Carson Bell and Renee Dohr Own the Only Two Firms

Question 188

Essay

Carson Bell and Renee Dohr own the only two firms in the United States that sell a unique herbal vitaminsupplement that has no close substitutes. They plan a secret meeting at the National Zoo in Washington,DC, to form a cartel in order to increase their profit.
-Do Carson and Renee have an incentive to cheat on their agreement with each other? Explain.

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A firm in a cartel can increase its prof...

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