ECONOMICS
COMPETITION AND MARKET STRUCTURES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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True
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False
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Either A or B
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None of the above
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Detailed explanation-1: -In the United States, cartel behavior (including price-fixing; volume, customer, and market allocation; and bid-rigging) can be a criminal violation of antitrust laws that may result in high fines for conspiring corporations and key corporate executives, and incarceration for individual defendants.
Detailed explanation-2: -Cartel conduct is mainly subject to criminal penalties under United States antitrust laws, although there are some cartel conduct, such as monopolization, resale price maintenance, etc. are subject to civil penalties. The Sherman Act and Clayton Acts are the two main laws regulating cartels.
Detailed explanation-3: -Cartels and collusive agreements as described above are illegal. They result in anti-competitive practices like price-fixing and market-sharing, which, in turn, reduce output and raise prices.
Detailed explanation-4: -The presence and behavior of the Sinaloa Cartel and CJNG is well-known in the United States. The two cartels dominate U.S. wholesale distribution of drugs, including fentanyl, cocaine, and methamphetamine.
Detailed explanation-5: -Cartels are illegal because a collusion between firms to raise the price of products by limiting supply deliberately can cause market inefficiencies.