Question

O The sugar industry in Canada is affectively adopoly with two em competing with each other format share, Supere the term coule and accept that propolit As a result, they each rare an increase in the role why this coursement below? O A. Became the firm with the lower long-run werage costs will be able to capture alle diving the second most of the market OB. Because each firm has an incentive to break the agreement by increasing put in order to increase their own profits OC. Because a non-cooperative outcome is inevitable in which output is further restricted and each freispratis reduced OD. Because each firm has an incentive to break the agreement by further restricting out in order to increase the price, thereby increasing the prots

Answer 1

Answer - B. Because each firm bad an incentive to break the agreement by increasing their output in order to increase their own profits

Explanation - Each firm could think selfishly and try to increase their output to increase their own profit thereby nullifying the agreement as well as disrupting the social equilibrium output. Hence , the collision agreement is difficult to sustain.