A major reason that firms form a cartel is to
A) reduce the elasticity of demand for the product.
B) enlarge the market share for each producer.
C) minimize the costs of production.
D) maximize joint profit.
E) increase competition.

Question

Quizplus · Accepted Answer

The main reason for firms to form a cartel is to maximize joint profit by controlling the quantity of output and raising prices. By acting together, firms can reduce output levels and charge higher prices, resulting in higher profits for all members of the cartel.

A Major Reason That Firms Form a Cartel Is to