Under which scenario is a cartel most likely to be successful?

Multiple choice question for Profit Maximizing Under Perfect Competition And Monopoly. Select an option, then review the explanation below.

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The copper industry, characterized by a limited number of producers and a uniform product.The fast-food sector, with many competitors but demand for fast food is relatively unresponsive to price changes.The coffee market, where the product is homogeneous but there are numerous growers involved.The car manufacturing industry, which has few manufacturers but products vary significantly.

Explanation

Cartels tend to function best in markets with few producers and standardized products, such as copper. This environment makes it easier to coordinate and enforce agreements. In contrast, markets with many producers or highly differentiated products face greater challenges in sustaining cartel arrangements.

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Under which scenario is a cartel most likely to be successful?

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