An agreement among firms to restrict production with the goal of earning higher profit is a(n)
A) pure monopoly.
B) oligopoly.
C) cartel.
D) duopoly.
E) imperfectly-competitive industry.

Question

Quizplus · Accepted Answer

A cartel is an agreement among firms to restrict production with the goal of earning higher profit. It is a type of oligopoly where firms come together to coordinate their production levels and prices. Pure monopoly and duopoly refer to situations where there is one dominant firm in the market and two dominant firms in the market, respectively. Imperfectly-competitive industry is a general term used to refer to markets that are not perfectly competitive, and may include oligopolies and monopolies.

An Agreement Among Firms to Restrict Production with the Goal