For cartels, as the number of firms (members of the cartel) increases,
A)the monopoly outcome becomes more likely.
B)the magnitude of the price effect decreases.
C)the more concerned each seller is about its own impact on the market price.
D)the easier it becomes to observe members violating their agreements.

Question

Quizplus · Accepted Answer

As the number of firms in a cartel increases, the price effect diminishes because each firm's output has a smaller impact on the overall market price, making it harder to maintain the monopoly outcome.

For Cartels, as the Number of Firms (Members of the Cartel)