ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A cartel, as defined by the Organisation for Economic Co-operation and Development (OECD), is when firms create a formal agreement to “raise or fix prices and to reduce output in order to increase profits.” This agreement harms consumers because it makes products unavailable or overly-expensive.

Detailed explanation-2: -The correct answer is Oligopoly. A group of independent producers whose intention is to increase their collective profit by various restricting practices such as price fixing, limiting supply, etc. is called as the Cartel.

Detailed explanation-3: -organization, usually of producing countries, that tries to control the price and quantity supplied of a particular commodity (usually a raw material). Examples are OPEC (petroleum) and the International Coffee Organization.

Detailed explanation-4: -A cartel occurs when two or more firms (usually within an oligopoly) enter into agreements to restrict the market supply and thereby fix the price of a product in a particular industry. The aim is to charge a high cartel price and maximise joint profits for cartel members.