At the time, it was customary for a company to be funded only for the duration of a single voyage and to be liquidated upon the return of the fleet. Investment in these expeditions was a very high-risk venture, not only because of the usual dangers of piracy, disease and shipwreck, but also because the interplay of inelastic demand and relatively elastic supply of spices could make prices tumble, thereby ruining prospects of profitability. To manage such risk, the forming of a cartel to control supply would seem logical. In 1600, the English were the first to adopt this approach by bundling their resources into a monopoly enterprise, the English East India Company, thereby threatening their Dutch competitors with ruin.
at the time it was customary for a company to be funded only for the duration of a single voyage and to be liquidated upon the return of the fleet investment in these expeditions was a very high-risk venture not only because of the usual dangers of piracy disease and shipwreck but also because the interplay of inelastic demand and relatively elastic supply of spices could make prices tumble thereby ruining prospects of profitability to manage such risk the forming of a cartel to control supply would seem logical in 1600 the english were the first to adopt this approach by bundling their resources into a monopoly enterprise the english east india company thereby threatening their dutch competitors with ruin