What is the objective of a cartel?
A) joint profit maximization
B) productive efficiency
C) allocative efficiency
D) individual profit maximization

Question

Quizplus · Accepted Answer

The main objective of a cartel is to maximize the profits of all its members by coordinating their actions and agreeing on production levels and prices. This is achieved through joint profit maximization, which involves setting production quotas and manipulating prices to raise the market price and increase overall profits for the cartel. The other options, productive efficiency and allocative efficiency, are related to maximizing social welfare and not the profits of individual firms in a cartel. Individual profit maximization is not the objective of a cartel as it involves firms competing against each other and not colluding to raise prices.

What Is the Objective of a Cartel