A cartel is a group of firms that coordinate their pricing and quantity decisions to maximize joint profits. They may collude to fix prices, divide markets, or set output quotas. Cartels are generally illegal and can be difficult to maintain as members often have conflicting interests.

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A Cartel Is

Question 14

Multiple Choice

A cartel is

A) a group of firms that coordinate their pricing and quantity decisions.
B) a type of oligopoly in which the demand curve is "kinked."
C) a duopoly market where firms have the exact product.
D) a group of firms that all produce the same level of output.

Correct Answer: