As the aggregate profit of a cartel can exceed the combined profits of the same firms acting
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As the aggregate profit of a cartel can exceed the combined profits of the same firms acting independently, firms have an incentive to form cartels and behave like a monopoly. However, cartels often fail for economic reasons. Why is this the case?
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Cartels which are agreements among competing firms to coordinate their actions and act like a monopoly can indeed increase profits for the participati...View the full answer
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