The table below shows the payoff (profit) matrix of Firm A and Firm B indicating the profit outcome that corresponds to each firm's pricing strategy (where $500 and $200 are the pricing strategies of two firms).Table 12.2

-Which of the following is an example of a cartel?
A)Advanced Micro Devices
B)AREVA
C)Organization of the Petroleum Exporting Countries
D)Combat Observation Laser Teams
E)Lloyds Banking Group

Question

The table below shows the payoff (profit) matrix of Firm A and Firm B indicating the profit outcome that corresponds to each firm's pricing strategy (where $500 and $200 are the pricing strategies of two firms).Table 12.2
 
-Which of the following is an example of a cartel?
A)Advanced Micro Devices 
B)AREVA 
C)Organization of the Petroleum Exporting Countries 
D)Combat Observation Laser Teams 
E)Lloyds Banking Group

Quizplus · Accepted Answer

Organization of the Petroleum Exporting Countries (OPEC) is an example of a cartel as it is a group of countries that work together to control the supply and price of oil. They do this by setting production quotas for each member country, which limits the overall supply of oil in the market, and by coordinating pricing strategies. The goal of a cartel is to increase profits for all members by reducing competition and keeping prices high.

The Table Below Shows the Payoff (Profit) Matrix of Firm