Assume That the Ruby Market Shares of Six Different Countries

Multiple Choice

Assume that the ruby market shares of six different countries are 30%, 25%, 20%, 15%, 6%, and 4%. However, the quality of the rubies and the mining costs vary across the six countries. Which statement accurately describes the likelihood of success for a cartel among the ruby-mining companies in the six countries?

A) There is a high likelihood of success since members have similar market shares.
B) The likelihood of success is low because of uneven market shares, product quality, and costs of production.
C) The likelihood is uncertain because uneven market shares and costs reduce chance of success, while uneven product quality increases the chance of success.
D) The likelihood of success is high because having a small number of firms in the cartel is the most important factor influencing the success of the cartel.