The largest problem faced in cartel pricing agreements such as OPEC is:
A) detecting violations of quota barriers by cartel participants
B) arriving at a profit maximizing price
C) attracting participants in the cartel
D) none of the above

Question

Quizplus · Accepted Answer

The largest problem faced in cartel pricing agreements such as OPEC is detecting violations of quota barriers by cartel participants. This is because participants may cheat by producing more than their allocated quota, which can lead to a decrease in prices and affect the cartel's profit structure. Therefore, monitoring and enforcing quota barriers is crucial for the success of a cartel pricing agreement.

The Largest Problem Faced in Cartel Pricing Agreements Such as OPEC