Cartel pushes up price of rubber
Course:- Business Economics
Reference No.:- EM13817328

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Several questions in this problem set are based on the 8/19/12 Wall Street Journal article "Cartel Pushes Up Price of Rubber." This article is 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 a rubber cartel feasible (according to what is mentioned in the article)?

A. There are no good substitutes and economies of scale are large - resulting in the need for large-scale production

B. Rubber trees only grow in the tropics and synthetic rubber can not always be substituted

C. Economies of scale are large - resulting in the need for large-scale production and rubber only grows in the tropics

D. All of the answers are correct

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