The Competition Bureau in Canada wants to increase competition and reduce monopoly power. Thus it it worries about industry concentration in Canada. Assume there is an oligopoly in Canada in the production of Computer Aided Design (CAD) machines which also has a cartel. Which of the following will make it easier for the Canadian cartel to operate effectively over time?

Survey Of Economics
10th Edition
ISBN:9781337111522
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter9: Monopolistic Competition And Oligoply
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The Competition Bureau in Canada wants to increase competition and reduce monopoly power. Thus it it worries about industry concentration in Canada. Assume there is an oligopoly in Canada in the production of Computer Aided Design (CAD) machines which also has a cartel. Which of the following will make it easier for the Canadian cartel to operate effectively over time?

Multiple Choice
  •  
    Demand for the CAD cartel's output becomes more elastic.
  •  
    The number of substitutes for the CAD cartel's output increases.
  •  
    get organized crime in involved  in the production of CAD. 
  •  
    Each member firm of the CAD cartel observes the pricing and output decisions of other firms in the CAD cartel.
  •  
    Demand for the CAD cartel's output decreases.
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