Legitimate Questions
If we are thinking seriously about Proportional Representation there two reasonable questions you might want to ask. First of all, if political parties know that they are operating under a Proportional Representation System, would that not encourage the formation of too many parties?
The second question stems from the first. And it is this. What happens if there is a large number of parties contesting in an election under a Proportional Representation System? How does that work?
Both questions can be answered together and quite easily. Keep in mind that there are over 130 countries that use Proportional Representation so this problem is not new or unique.
The situation in question #2 van be remedied by specifying the minimum number of votes a party must obtain, to be assigned seats. Let’s take a look at such a situation and how it is works out.
Example 4
In Exhibit 4, there are still five parties. Again C, D and E are small parties. But this time, the system specifies, that for a party to gain seats, it must obtain at least 5,000 votes. This is not a number determined by any organization anywhere; it is just an example.

As you can see from the exhibit, party E will not be eligible for any seats because it has not met the 5000 vote threshold. So its votes will be discarded. Exhibit 5 shows what the final PRS table would look like.

Now, since no one party has the required majority of 16 seats, the parties will have to form a Ruling Coalition government as explained before. So, party A could form a ruling coalition with C, or B could form such a coalition with C and D.