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Types of Antitrust Violations. Investing Commodities. What Is a Cartel? Key Takeaways A cartel is a collection of independent businesses or organizations that collude in order to manipulate the price of a product or service. Cartels are competitors in the same industry and seek to reduce that competition by controlling the price in agreement with one another. Tactics used by cartels include reduction of supply, price-fixing, collusive bidding, and market carving. In the majority of regions, cartels are considered illegal and promoters of anti-competitive practices.
The actions of cartels hurt consumers primarily through increased prices and lack of transparency. Article Sources. Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.
Compare Accounts. The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace. Related Terms What Is an Oligopoly? An oligopoly is a market structure with a small number of firms, none of which can keep the others from having significant influence. What is the difference between Cartel and Monopoly? Monopolies and cartels are quite similar to one another in that they both result in market places that have less competition, higher prices, and inferior quality goods and services.
Monopolies and cartels are both equally harmful to free market places and result in consumers paying inflated prices for low quality necessities.
The main difference between the two is that monopolies have only one dominant player whom single handedly controls the production, sales, and pricing of a particular product. A cartel is an organization that is formed by a number of companies selling a particular product and controls the market place for that particular product or service.
In a monopoly, only one organization will benefit whereas, in a cartel, the entire group of cartel members will benefit. However, in either situation the consumer is the loser.
Coming from Engineering cum Human Resource Development background, has over 10 years experience in content developmet and management. Your email address will not be published. Is there a similarity between cartel pricing and monopoly pricing? What are cartels in economics? What is the difference between monopoly and monopoly power? What percentage makes a monopoly? Why did monopoly exist in a capitalist economy? In what two ways can monopoly power be controlled? What are the disadvantages of oligopoly?
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