Why are cartels difficult to maintain
A)Competition laws are difficult to enforce.
B)Cartel agreements are conducive to monopoly outcomes.
C)There is inevitable tension between cooperation and self-interest in a cartel.
D)Collusion is an unspoken agreement.

Question

Quizplus · Accepted Answer

Cartels require a delicate balance between members who must cooperate in order to maintain market power, while also pursuing their own self-interest. This tension can often break down, leading to members cheating on agreements or leaving the cartel altogether. As a result, cartels can be difficult to maintain in the long-term. While competition laws may present some obstacles, they are not the primary reason cartels struggle to sustain themselves. The other choices (B and D) are not accurate statements about cartels.

Why Are Cartels Difficult to Maintain