Which of the following would increase the likelihood that firms in an industry could successfully collude?

Question

Quizplus · Accepted Answer

High barriers to entry in the industry would limit the number of new firms entering the market and make it easier for existing firms to collude and maintain higher prices. A large number of firms in the industry would make collusion more difficult as there are more firms to monitor and enforce the agreement. Unstable demand conditions in the industry would make collusion more difficult as it would be harder to predict and coordinate production levels. Product characteristics that make it difficult for firms to detect other firms that cheat on the agreement would also make collusion more difficult as there would be less transparency in the market.

Which of the Following Would Increase the Likelihood That Firms