All of the following are conditions which are favorable to the formation of cartels except
A)the existence of a small number of firms.
B)geographic proximity of firms.
C)homogeneity of the product.
D)easy entry into the industry.

Question

Quizplus · Accepted Answer

Easy entry into the industry would make it harder for firms to maintain a cartel as new firms may enter and disrupt their agreement. The other factors listed would make it easier for firms to coordinate and maintain a cartel.

All of the Following Are Conditions Which Are Favorable to the Formation