In this scenario positive rather than negative profits can exist, going where others cannot enter and gain some of these profits because sharing the market means they have to enter on a smaller scale of operation and therefore face higher average costs. 9. Explain why cartels are naturally unstable. Do these factors explain OPEC's decline as an international cartel? The cartel behavior of companies consists in setting prices prohibited by competition law. The reason for the instability of cartels is that many price-fixing or market-sharing agreements sooner or later collapse. Some examples of these collapses are listed: • Non-cartel companies entering the industry create new, disruptive competition. • Government agencies have been particularly active in trying to crack down on cartel behavior and tighten laws in order to increase price exposure