Cartels are difficult to maintain because
A)the monopoly output is very difficult to determine.
B)the number of firms is always large.
C)costs to the firms in a cartel are continually rising.
D)each firm has an incentive to deviate from its agreed output level.

Question

​Cartels are difficult to maintain because
A)​the monopoly output is very difficult to determine.
B)​the number of firms is always large.
C)​costs to the firms in a cartel are continually rising.
D)​each firm has an incentive to deviate from its agreed output level.

Quizplus · Accepted Answer

Cartels are difficult to maintain because each firm in the cartel has an incentive to cheat by producing more than the agreed output level to gain a larger market share and increase profits, undermining the cartel's agreement to restrict output and keep prices high.

​Cartels Are Difficult to Maintain Because

Cartels Are Difficult to Maintain Because