What is the correct term used to describe a group of firms that act in unison in order to set price and output for goods in the market?
  1. Oligopoly
  2. Cartel
  3. Monopoly
  4. Barrier to entry
Explanation
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.
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