Difference between revisions of "Cartel"
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A '''cartel''' is an agreement among two or more firms in the same industry to co-operate in fixing prices and/or carving up the market and restricting the amount of output they produce. It is particularly common when there is an [[oligopoly]]. The aim of such collusion is to increase profit by reducing competition. Identifying and breaking up cartels is an important part of the competition policy overseen by [[Antitrust laws]] in most countries, although proving the existence of a cartel is rarely easy, as firms are usually not so careless as to put agreements to collude on paper. The desire to form cartels is strong, however most cartels are unstable. | A '''cartel''' is an agreement among two or more firms in the same industry to co-operate in fixing prices and/or carving up the market and restricting the amount of output they produce. It is particularly common when there is an [[oligopoly]]. The aim of such collusion is to increase profit by reducing competition. Identifying and breaking up cartels is an important part of the competition policy overseen by [[Antitrust laws]] in most countries, although proving the existence of a cartel is rarely easy, as firms are usually not so careless as to put agreements to collude on paper. The desire to form cartels is strong, however most cartels are unstable. | ||
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| + | ==See Also== | ||
| + | *[[Gulf Cartel]] | ||
[[category:economics]] | [[category:economics]] | ||
Revision as of 23:00, March 17, 2009
A cartel is an agreement among two or more firms in the same industry to co-operate in fixing prices and/or carving up the market and restricting the amount of output they produce. It is particularly common when there is an oligopoly. The aim of such collusion is to increase profit by reducing competition. Identifying and breaking up cartels is an important part of the competition policy overseen by Antitrust laws in most countries, although proving the existence of a cartel is rarely easy, as firms are usually not so careless as to put agreements to collude on paper. The desire to form cartels is strong, however most cartels are unstable.