A cartel most likely forms in
A) an oligopolistic market.
B) a perfectly competitive market.
C) a monopolistically competitive market.
D) a heavily regulated industry.

Question

Quizplus · Accepted Answer

A cartel is a group of firms that come together to jointly influence market outcomes, typically by agreeing to limit production and/or fix prices. This type of behavior is most likely to occur in an oligopolistic market, where there are only a few dominant firms with significant market power. In a perfectly competitive market, there are too many small firms to coordinate effectively, and in a monopolistically competitive market, there is too much product differentiation and competition to facilitate cartel formation. In a heavily regulated industry, government intervention would likely prevent or punish cartel behavior.

A Cartel Most Likely Forms in