Economics Perfect Competition Questions
A cartel is a group of independent firms or producers in the same industry that come together to coordinate their actions and behavior in order to maximize their collective profits. Cartels typically involve agreements among the participating firms to fix prices, limit production, allocate market shares, and engage in other collusive practices. By acting as a single entity, cartels aim to reduce competition and increase their market power, allowing them to charge higher prices and earn greater profits than they would in a competitive market. However, cartels are generally illegal in most countries due to their negative impact on consumer welfare and market efficiency.