asked 107k views
1 vote
Explain why member firms of a cartel like OPEC have incentives to agree to a low cartel production level and then produce more than its quota.

asked
User Xerri
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7.5k points

2 Answers

1 vote

A.

Its leaders were arrested and imprisoned in American jails.

answered
User Xeroxoid
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8.8k points
5 votes
Because the members of OPEC are dealing with oils as their main selling commodities.

The thing is, oil is an un-renewable natural resources , well not unnecessarily un-renewable, but it took hundred of millions of years for earth to produce a new oil.

So the OPEC members have to be really careful in maintaining their quota. And also, if they produce more, the price of the oils will drop.
answered
User Emkman
by
8.0k points
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