All else equal, a cartel sets the price higher and produces less than in a competitive market.

Question

Quizplus · Accepted Answer

This is because a cartel consists of a group of firms that work together to restrict competition and maximize profits. By setting higher prices and limiting production, they can create artificial scarcity and maintain higher profits. In a competitive market, firms are forced to lower their prices and increase production in order to remain competitive.

All Else Equal, a Cartel Sets the Price Higher and Produces