Question

what obstacles might a group of oligopolists encounter in forming a cartel?

Answer 1

what obstacles might a group of oligopolists encounter in forming a cartel

1) Risk of regulation penalty: The regulator might stall such cartel in public interest and impose huge penalities on the firms which can restrict them to form cartel.

2) Prison's dilemma: Here the issue is that one firm might not follow the agreed terms of the cartel which can be disadvantage for other firms as it is very difficult to track work of each firm.

3) Limiting production: In this case, the cartel generally impose limit on production to keep output higher which may not go well with some members of the group as they may be focused on raising their market share.

the above is answer..