question archive A cartel is a group of firms that A
A cartel is a group of firms that A
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A cartel is a group of firms that
A. produce differentiated products.
B. agree to restrict output to boost their profit.
C. produce products that are complements.
D. agree to boost output to boost their profit.
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The correct answer to the given question is B. agree to restrict output to boost their profit.
A cartel is a group of firms which agrees to restrict output collectively so that the profit can be boosted for all the players. Such cartel usually exists in industries where there is an oligopoly competition. An example of cartel is OPEC (Oil and Petroleum Exporting Countries) which produces crude oil for most countries of the world.
