Question

1. What is a cartel?

2. Is a cartel legal in the U.S?

3. If a cartel is illegal, do they sometimes form?

4. Once formed, is there an incentive to cheat on the cartel?

Answer 1

1. t is a cartel?

• A cartel is an organization formed by the deal or agreement between the suppliers and producers of goods which have a motive of improving profit.
• A cartel reduces market competition.
• It is also an association of producers and suppliers having the goal to maximize price eliminating the competition.

2. Is a cartel legal in the U.S?

• It is illegal in US
• The Cartels are prohibited in US by the anti-trust laws.
• It is illegal because it will make consumers pay more money for products.

3. If a cartel is illegal, do they sometimes form?

• Even after being illegal in US they do form sometimes in United States without government provision.
• This could be the hidden cartel without government knowledge..

4. Once formed, is there an incentive to cheat on the cartel?

• The cartel members may try to cheat on agreement to reduce production.
• And yes there is incentive to cheat on cartel by the members.