Which of the following makes a cartel short-lived?
A) stable market demand
B) few firms in the cartel
C) cheating
D) contracting

Question

Quizplus · Accepted Answer

Cheating among cartel members is the most common reason for cartels to break down. When one member realizes that it can increase its profits by producing more and selling more, it will start cheating on the agreement. As more members start cheating, the cartel's discipline breaks down, and it becomes increasingly difficult to enforce the agreement. Eventually, the cartel collapses.

Which of the Following Makes a Cartel Short-Lived