What conditions are favorable to the formation and maintenance of a cartel?

There ought to be fewer firms in the business with the goal that each firm has a noteworthy share in determining the market price and output to be produced. The item that every one of them is selling is indistinguishable and not separated. Entry by new firms is highly troublesome. Likewise, there ought to be a uniform cost structure with the goal that no single cartel part can deliver at a lower cost.

Geographical closeness or nearness is likewise a factor. Note that cartel individuals have motivations to cheat and stray from cartel concurred output. A suitable discipline technique is in this way required. Firms should over and over collaborate with others to examine their conduct. Market dependability and accessibility of data are additionally required to keep up a cartel. A typical promoting office is required to stay away from any vulnerability.