Principles of Microeconomics / Unit 9 MIC 0822 short lesson, about 20 seconds
The Cartel's Temptation
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The idea
A cartel that fixes the monopoly output leaves each member tempted to produce a little more at the high price. If enough give in, output rises and price falls toward the competitive level.
In practice
Each member gains by cheating if others hold; all lose if all cheat.
Where people slip
Outsiders, entrants and the law add pressure. Cartels need enforcement they cannot legally obtain.
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