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In the Cartel model of oligopoly, Firms participating in the cartel make similar, but differentiated products...

In the Cartel model of oligopoly,

  1. Firms participating in the cartel make similar, but differentiated products
  2. Firms participating in the cartel have incentives to produce less than their agreed upon shares in order to charge higher prices for their product
  3. Firms participating in the cartel set their own prices based on the demand they face.
  4. Firms participating in the cartel agree to set their own production based on agreed upon market shares.
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Answer #1

Option D is correct

There is an agreement in which joint production is determined and according to the demand the price is set. no member is allowed to change the price or the quantity supplied decided once the agreement is in practice. However they are allowed set their own quantity before the agreement is implemented. The product sold by the members is identical.

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