Which one of the following factors increases the likelihood that a cartel agreement will lead to higher profit for cartel members?

A) free entry into the cartelized market
B) a small number of sellers involved in the cartel agreement
C) the cartel members produce a differentiated product
D) highly unstable demand for the product produced by the cartel

Cartel Agreement

An arrangement among competing firms to control prices or output in a market, often to limit competition.

Cartelized Market

A market situation where a small number of firms collaborate to control prices and production, limiting competition.

Cartel Members

Members of a cartel work together to control the production and pricing of goods in a particular market, effectively limiting competition.