Cartel agreements are more likely to succeed if:

Question

Quizplus · Accepted Answer

Cartel agreements are more likely to succeed when there are few firms in the industry producing identical products. In this scenario, the firms can control the market price by limiting their output or coordinating their pricing behavior with minimal risk of defection from outside competitors. In contrast, in industries with many firms or differentiated products, it becomes harder to monitor and enforce compliance with the cartel agreement, as firms may have different cost structures or incentives to deviate from the collusive behavior.

Cartel Agreements Are More Likely to Succeed If