Collusion makes firms better off because if they act as a single entity (a cartel) they can reduce output and increase their prices and profits. But some cartels have failed and others are unstable. Which of the following is a reason why cartels often break down?
A. Members of a cartel may resent having to share their profits equally.
B. Most cartels do not have a dominant strategy.
C. When a cartel is profitable the amount of competition is faces equally.
D. Each member of a cartel has an incentive to "chear" on the collusive agreement by producing more than its share when everyone else sticks with the collusive agreement.