A firm could gain from cheating on a cartel agreement by doing all of the following except:

Question

Quizplus · Accepted Answer

Raising its price above the agreed level would not be a way to cheat on a cartel agreement because it would likely result in the firm losing sales to other cartel members who stick to the agreed prices. Cheating typically involves actions that allow a firm to capture more market share or sales at the expense of other cartel members, such as lowering prices or selling more than the agreed quota, not raising prices.

A Firm Could Gain from Cheating on a Cartel Agreement