Discuss problems that five suppliers will face in forming

Reference no: EM131505129

Question: Consider an industry with five suppliers. One is very large relative to total supply, with the capacity, in the relevant price range, to supply a significant proportion of market supply on its own. The remaining suppliers comprise two middle size firms and two that are relatively small. The largest and smallest firms each have relatively low (constant) unit costs, but average costs are somewhat higher for the two middle size firms. Discuss the problems that the five suppliers will face in forming and maintaining a cartel.

Reference no: EM131505129

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