Which of the following would be most likely to contribute to the breakdown of a cartel in a natural resource (e.g., bauxite) market?
A)high prices
B)low price elasticity of demand
C)high compatibility of member interests
D)unequal member ownership of the natural resource

Question

Quizplus · Accepted Answer

Unequal member ownership of the natural resource would likely lead to disagreement among cartel members regarding production levels and prices, undermining the cohesive action necessary for a successful cartel. The other options - high prices, low price elasticity of demand, and high compatibility of member interests - would actually work in favor of a cartel by providing a supportive market environment and reducing internal conflicts.

Which of the Following Would Be Most Likely to Contribute