1. If most cartel members keep their agreement to cut back production

A) its not profitable in the short run for another member to increase production.

B) its profitable in the short run for another member to increase production.

C) cheating by another member won't be detected.

D) the losses associated with cheating are internalized by the cheater.

2. People sometimes point to similar gas prices at competing gas stations as evidence of collusion when they could just be selling at market price. If this is not good evidence of collusion, what is?

A) the profits of the companies are unusually high in the short run.

B) the station owners regularly have morning coffee together.

C) there is is some kind of punishment for cheating.

D) someone thinks they overheard their plans for collusion.