Certain industry characteristics are necessary for the successful operation and formations of a cartel. What are the requirements for the successful formation and operation of cartels?

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Jamar FerryLv2

25 Feb 2020

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Related questions

a. The firms in an oligopoly would find it advantageous to form a cartel. What is a cartel? What price would the cartel charge? That is, would they charge and price closer to what a monopolist would charge, or closer to the price that would prevail in a competitive market? Why?

b. Cartels are difficult to form and maintain. Why is this? Even if they are legal (they are not in the U.S.), what would make it difficult for the firms to cooperate? Under what circumstances is the cartel more likely to be successful? give at least two difficulties.

C. Briefly describe at least one strategy a firm could use to encourage cooperation among the other firm(s) in their cartel.

d. Can oligopolies be efficient? Why or why not?