Because firms in any industry can always make greater profits by colluding, there is an inevitable tendency

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Because firms in any industry can always make greater profits by colluding, there is an inevitable tendency for competitive industries to become cartels over time. Is the first part of this statement correct? Is the second part? Explain.

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Microeconomics Theory and Applications

ISBN: 978-1118758878

12th edition

Authors: Edgar K. Browning, Mark A. Zupan

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Question Posted: Nov 14, 2014 08:27 AM

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Because firms in any industry can always make greater profits by colluding, there is an inevitable tendency

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The first part of the statement is true only for the short run Collusion by the exist...View the full answer

Microeconomics Theory and Applications

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