Question
Suppose that all five of the producers of ready-mix cement in the Denver area have entered into a cartel agreement, so that they are producing
Suppose that all five of the producers of ready-mix cement in the Denver area have entered into a cartel agreement, so that they are producing and pricing at the profit-maximizing monopoly level.
a. How would a firm's managers "cheat" on this agreement?
b. Given that the four other competitors are not instantaneous, can cheating be profitable?
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Managerial Economics Theory Applications and Cases
Authors: Bruce Allen, Keith Weigelt, Neil A. Doherty, Edwin Mansfield
8th edition
978-0393124491, 393124495, 978-0039391277, 393912779, 978-0393912777
