A cartel is a group of firms that join together to restrict output, raise prices, and increase profits. This is usually done by agreeing to limit production or allocate market share among the cartel members. Cartels are illegal in most countries because they reduce competition and harm consumers.

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A Cartel Is

Question 125

Multiple Choice

A cartel is:

A) a joint venture of two companies.
B) a joining of firms for the purpose of fixing prices and controlling output.
C) a breaking up of a company into two or more parts.
D) the joining of industry with government to solve a specified problem.
E) the joining of two firms with unrelated products.

Correct Answer: