What are Cartels? Give an example.
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______ʜᴇʏ ᴍᴀᴛᴇ_______
A Cartel is a formal Collusive Agreement among firm under Oligopoly.Firm collude to avoid competition.They fix their output and prices as decided by recorded .
EXAMPLE________
OPEC SET -UO IN 196O BY THE WORLD FIVE MAJOR OIL PRODUCING COUNTRIES.
✨ HOPE THIS HELPS YOU ✨
A Cartel is a formal Collusive Agreement among firm under Oligopoly.Firm collude to avoid competition.They fix their output and prices as decided by recorded .
EXAMPLE________
OPEC SET -UO IN 196O BY THE WORLD FIVE MAJOR OIL PRODUCING COUNTRIES.
✨ HOPE THIS HELPS YOU ✨
Anonymous:
nice answer
Answered by
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HEY DEAR_________❤️❤️❤️❤️❤️
HERE IS YOUR ANSWER:-
=>A cartel is a group of apparently independent producers whose goal is to increase their collective profits by means of price fixing, limiting supply, or other restrictive practices. Cartels typically control selling prices, but some are organized to control the prices of purchased inputs.
EXAMPLE:-Company A and Company B are two identical firms in the industry. If the firms were price-takers (in the case of perfect competition), they would produce 3 units at a price of $6,000. By forming a cartel, both companies sell a total of 4 units at a price of $9,000 and realize monopoly profits. Company A sells 2 units, and Company B sells 2 units, and their total profit is $3,000.
Company A breaks the deal and produces 3 units instead of 2 units. In this case, the total that both companies produce is 5 units at a price of $7,500. Company A that broke the deal has a profit of $4,500, which is higher than the monopolistic profits of $3,000, whereas Company B realizes a loss of $1,000.
The most likely scenario is that Company B will also produce 3 units so that the two firms reach a new equilibrium in perfect competition.
HOPE IT WILL HELP YOU....
<<<<❤️❤️❤️❤️>>>>
✌️✌️✌️✌️✌️✌️✌️
^_^
HERE IS YOUR ANSWER:-
=>A cartel is a group of apparently independent producers whose goal is to increase their collective profits by means of price fixing, limiting supply, or other restrictive practices. Cartels typically control selling prices, but some are organized to control the prices of purchased inputs.
EXAMPLE:-Company A and Company B are two identical firms in the industry. If the firms were price-takers (in the case of perfect competition), they would produce 3 units at a price of $6,000. By forming a cartel, both companies sell a total of 4 units at a price of $9,000 and realize monopoly profits. Company A sells 2 units, and Company B sells 2 units, and their total profit is $3,000.
Company A breaks the deal and produces 3 units instead of 2 units. In this case, the total that both companies produce is 5 units at a price of $7,500. Company A that broke the deal has a profit of $4,500, which is higher than the monopolistic profits of $3,000, whereas Company B realizes a loss of $1,000.
The most likely scenario is that Company B will also produce 3 units so that the two firms reach a new equilibrium in perfect competition.
HOPE IT WILL HELP YOU....
<<<<❤️❤️❤️❤️>>>>
✌️✌️✌️✌️✌️✌️✌️
^_^
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