Cartels can only exist:
A) in oligopoly markets.
B) when products are homogeneous.
C) when products are not homogeneous.
D) in countries where they are legal.
E) when demand curves are perfectly inelastic.

Question

Quizplus · Accepted Answer

Cartels can only exist in oligopoly markets where a few firms have significant control over the market. In such markets, the firms can collude to act like one monopoly, agreeing to collectively set prices and output levels.

Answer: C 
 Cartels can also exist when products are not homogeneous, as firms can agree to divide the market by product type or geography and set prices and output levels accordingly.

Therefore, the best answers are A and C.

Cartels Can Only Exist