The only way a cartel is able to maintain its market power is if:
A)all the members of cartel continue to cooperate
B)the product has horizontal demand curve
C)the product has an inelastic demand for their product
D)the government uses competition law to break-up the cartel

Question

Quizplus · Accepted Answer

Cartels maintain their market power through cooperation among members to control prices or output. Without cooperation, individual members may undercut prices or increase output, undermining the cartel's objectives. Horizontal demand curves (perfect competition) or inelastic demand do not ensure cartel stability. Government intervention typically aims to break up cartels, not sustain them.

The Only Way a Cartel Is Able to Maintain Its