alleryStart learning →Cartels are harder to sustain when the industry has:
AVery high entry barriers
BOnly a single seller
CA smaller number of firms
DA larger number of firms
Answer & Solution
Correct answer: D. A larger number of firms
With more firms each gets less collusive profit, so the incentive to deviate grows.
Keep practising Price-Output Determination under Different Market Forms
Browse all Price-Output Determination under Different Market Forms questions for CA Foundation, or explore more Business Economics topics.
Related questions
Critics say the perfect competition model wrongly shows all agents as:The equilibrium price of a perfectly competitive market is fixed where:Which markets come closest to perfect competition in practice?Which economic theorem says competitive equilibria are Pareto-efficient?In the short run, perfectly competitive firms are:A firm sells 200 units at Rs 50 each, with average cost of Rs 42 per unit. Its economic prNormal profit is treated by economists as a component of:What attracts new firms into a perfectly competitive industry?