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

-A cartel is an organization of firms in which there is a dominant firm which dictates price and output decisions to other member firms.

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
 
-A cartel is an organization of firms in which there is a dominant firm which dictates price and output decisions to other member firms.

Quizplus · Accepted Answer

The definition of a cartel does not include a dominant firm dictating decisions to others. Cartels are formed to control prices and limit competition among member firms.

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