A cartel is
A)a group of oligopolists who try to behave like a single monopolist and split the benefits among themselves.
B)a government-approved organization for the exchange of technical information among firms.
C)a form of competition among oligopolists.
D)a regulated industry that is officially permitted to set the price of its product above long-run average total cost.

Question

Quizplus · Accepted Answer

A cartel is a group of oligopolists who collude to act like a single monopolist and maximize profits by jointly controlling prices and output. Members of a cartel agree to reduce output and raise prices, which results in higher profits for all members. The benefits of this strategy are shared among members, which is why they group together in the first place. While cartels are illegal in many countries, they still exist in some industries and in some parts of the world.

A Cartel Is