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Homework answers / question archive / What are Cartel and Collusion, and how do they form to determine price and output combination? What are the impacts of practicing cartel and collusion? Give a real-world example in your responses
What are Cartel and Collusion, and how do they form to determine price and output combination? What are the impacts of practicing cartel and collusion? Give a real-world example in your responses.
Collusion is a practice to where firms of the same industry cooperate with each to increase the price over the competitive level, it is of two types
Explicit : in which firms have a direct communication and cooperation
Tacit : it doesn't involve any direct cooperation
A Cartel is a group of similar organizations in the same industry to control the prices so as to remain competitive generally they reduce the supply of their goods in order to charge higher prices.
OPEC (organizations for petroleum exporting countries) is the biggest cartel in the world which regulates the prices of oil, its members all oil producing and exporting countries recently quatar left the opec because of being dissatisfied with the policies.
