Cartels may tend to collapse and lose their power because of new entrants.

Question

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When new entrants enter a market dominated by a cartel, they disrupt the cartel's ability to set prices and control the market. This can lead to price competition and a reduction in the cartel's power. Additionally, new entrants may undercut cartel prices or offer new and innovative products, further eroding the cartel's dominance. Over time, these competitive pressures can lead to the collapse of the cartel.

Cartels May Tend to Collapse and Lose Their Power Because