CLEP Microeconomics Exam Prep

Answer - B - A cartel is a group of firms that act in unison in order to set price and output for goods in the market.

Key Takeaway: A cartel is a formal agreement that is created among competing business in order to effectively market and produce a good, as well as fix prices over the market. Cartels are common in an oligopoly, where there are only a few sellers selling one type of product. The overall aim of a cartel is to increase profits by wiping out the competition.