For a cartel to succeed,
A)it does not need the cooperation of a majority of firms in the industry.
B)there must be free entry of rival firms.
C)consumers must have alternative products available to satisfy the same need.
D)no major producer can remain outside the agreement of the cartel.
E)the industry must have an elastic demand.

Question

Quizplus · Accepted Answer

For a cartel to succeed, major producers must be a part of the agreement, as they have the ability to significantly impact the market. If a major producer remains outside the cartel, they could increase production and undercut the cartel's prices, leading to its breakdown.

For a Cartel to Succeed