A few questions in this problem set are based on the comments made by James Love to Congress regarding antitrust policy and the Petroleum industry. These are found at the end of the module on Antitrust Policy. Try to read the entire article carefully first... and then see if you can answer the questions (rather than fishing out the answer each time). Obviously you will go back and check to make sure you have it correct ... but to absorb the content it is best read it all first before going back.
Why is less concentration a problem for a cartel?
A. If you cannot concentrate you lose focus.
B. Licensing fees must be paid on an individual basis - resulting in wasted costs collectively.
C. More attention will be paid by regulators as more firms are in the industry
D. It is harder to monitor cheating within the cartel.