A car manufacturer Volvo is interested in signing new deals with car dealers across Sweden to sell Volvo cars. However, Volvo faces constraints of collecting full information about the market and the dealers. i)What are the likely constraints of collecting market information? ii)When the dealers know that Volvo cannot gain full information, they have an incentive to cartelize and act like a monopoly. How does this affect Volvo and the market? iii) What strategies can Volvo use to prevent the dealers from acting in a way that can harm Volvo? iv) Discuss desirable and undesirable effects of vertical restriction.

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