In an oligopolistic market, collusive agreements can be difficult to sustain over the long run. All other things being equal, which combination of factors A, B, C or D is most likely to increase the stability of a collusive cartel?
| Number of firms in the agreement | Similarity of cost structures | Barriers to entry | |
|---|---|---|---|
| A | Many | Low | Low |
| B | Few | High | High |
| C | Few | Low | High |
| D | Many | High | Low |
Many firms, Low similarity of cost structures, Low barriers to entry
Few firms, High similarity of cost structures, High barriers to entry
Few firms, Low similarity of cost structures, High barriers to entry
Many firms, High similarity of cost structures, Low barriers to entry
