Open and explicit agreements concerning pricing and output shares transform an oligopoly into a

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Open and explicit agreements concerning pricing and output shares transform an oligopoly into a cartel. A cartel is a group of firms that come together and collude to restrict output, raise prices, and increase profits, essentially acting as a monopolist. This type of behavior is illegal in most countries and is subject to strict antitrust laws. Therefore, creating a cartel is not a desirable situation for a market.

Open and Explicit Agreements Concerning Pricing and Output Shares Transform