Cartels are typically subject to cheating by their members because

A. Barriers to entry do not exist so new entrants will join.

B. Product differentiation allows the firms in the cartel to cheat.

C. If the other firms stick to the agreement, a firm can increase its profits by cutting its price.

D. The U.S. Justice Department will punish any cartel agreement before the cartel has had a chance to operate.

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C If the other firms stick to the agreement a firm can increase its profits by ... View the full answer