Cartels are not stable because it is in the interest of each of the members to ____ beyond what is in the cartel's general interest.

Question

Quizplus · Accepted Answer

Cartels are formed to restrict the production and increase the price of goods or services to maximize profits. However, each member of the cartel has an incentive to cheat by increasing their own production to capture a larger market share and earn higher profits. This leads to instability in the cartel, as members try to pursue their self-interest beyond what is in the cartel's general interest.

Cartels Are Not Stable Because It Is in the Interest