A cartel is formed by firms that enter into a formal agreement to fix prices and output levels to maximize joint profits. This type of agreement is illegal and considered anti-competitive behavior by most countries.

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A Cartel Is

Question 81

Multiple Choice

A cartel is

A) a temporary storage facility for automobiles.
B) a group of firms that enter into an informal agreement to fix prices to maximise joint profits.
C) a group of firms that enter into a formal agreement to fix prices to maximise joint profits.
D) an example of a group of firms that collectively regulate a competitive industry.

Correct Answer: