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Having governments enforce your cartel certain helps keep the outside activities to a minimum. A free market system with futures, and competition, etc, can ind
by mabbo 11y ago
Having governments enforce your cartel certain helps keep the outside activities to a minimum.
A free market system with futures, and competition, etc, can indeed help deal with variation of prices and supply. But it still is a free market, in which price is determined by supply and demand. Producers are at the whim of the market in terms of what they make.
With a cartel, supply is controlled near-absolutely, and therefore price can be controlled. The cartel can choose the price at which expected revenue/profits are maximized- often a price that lowers total sales, but increases total revenue (as revenue is price * sales).
This is why I say that the Federation is terrible for consumers (who don't seem to care much) but great for producers- even the ones being told to cut back how much they produce. The Quebec government has an incentive to enforce the cartel- higher syrup prices means higher exports, more money coming into Quebec, which is all taxed.
Yep. It's awful for guys like me who want to goddamn soak their pancakes in the gold stuff. It's great if you happen to own 100 acres of Maple trees. Even if you're told to pretend you own 80.