1) Single milk boxes (6.75oz) are produced by 3 large dairies, and sold to three types of buyers.

a) school lunch programs, which decide purchases based on competitive bidding processes: dairies submit sealed bids, the contract is awarded to the lowest bidder, and all bids are made public once opened.

b) small restaurant and convenience stores, which buy at standard wholesale list prices.

c) retail chains, where large buyers may sign annual supply contracts with price and quantity terms negotiated directly with a dairy.

In which market do you think the 3 dairies are most likely to maintain a "cooperative" price level (i.e. form a cartel)? In which market do you think this is least likely? Why?