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When cartels are created, usually in oligopolistic industries, few firms make agreements on things such as production and prices. This ensures that the few firms in the cartel have economic profit and will eventually drive off weaker firms. This usually results in monopolistic behaviors for the remaining firms and eventually the prices catch up to the consumer. Cartels tend to arise in markets where there are few firms and each firm has a signeficant share in the market.
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Are Collusion and cartels are unstable in the long run due to Government regulation?
In many places where the cartels are in full power, the government has no control. Collusion and cartels are not unstable because in many countries, they have overtook the central governments.
How do you use in the long run in the sentence?
My faith will see me through in the long run. Marathon runners excel in the long run. His sprints are spectacular, but he'll lose out in the long run.
Is monetary policy neutral in both the short run and the long run?
Monetary policy is not neutral in the short-run but neutral in the long-run. Besides, fiscal policy is not neutral in both short-run and long-run.
Why are firms willing to accept economic losses in the short run but not the long run?
There are sunk cost in the short run but not in long run.
What is Short run and long run price elasticity of demand?
is the long run elasticity of demand is ever smaller than the short run elasticity of demand.
