Asked by Animel Amber on May 23, 2024
Verified
Cartels with a small number of firms have a greater probability of reaching the monopoly outcome than do cartels with a larger number of firms.
Cartels
Groups of independent market participants who collude with one another to manipulate the price of a good or service in the market.
Monopoly Outcome
The result of a market condition in which a single company or entity has exclusive control over a particular good or service, leading to limited competition.
- Identify the conditions under which cartels are more or less likely to achieve monopoly outcomes.
Verified Answer
TL
Tania LozanoMay 25, 2024
Final Answer :
True
Explanation :
Cartels with a smaller number of firms find it easier to coordinate on prices and output levels, monitor each other's behavior, and enforce cartel agreements, leading to a greater probability of achieving monopoly-like outcomes.
Learning Objectives
- Identify the conditions under which cartels are more or less likely to achieve monopoly outcomes.