Firms form or join cartels to improve their performance. Defecting to improve individual performance is rational and common. This is because managers of the firms in the cartel are REMM's, incentives to defect from the agreement are huge, and
a) Defecting managers know that defection is difficult to prove in court
b) Defecting managers may be are rewarded for above-normal returns
c) Defecting managers tend to plead guilty to a lesser charge
d) Defecting managers do not understand how cartels work.
ANS B