1. It has often been noted that cartel firms often maintain excessive capacity. This is true for example in the case of OPEC (especially for Saudi Arabia). One explanation of this is that the success of the cartel inevitably leads the members to reinvest their profits in new capacity. In this view, the cartel sews the seeds of its own destruction. Can you provide an alternative explanation? What implications does your explanation have for the long run viability of the cartel?