- 1 Marks
Question
An arrangement between the rival firms in an industry to operate the same policies on pricing is called a/an:
A. Monopoly
B. Cartel
C. Merger
D. Acquisition
E. Strategic Alliance
Answer
Answer: B (Cartel)
Explanation:
A cartel is an agreement between rival firms in the same industry to coordinate their pricing and output policies. This practice is often done to reduce competition and increase profitability. It is typically illegal in many countries due to its anti-competitive nature.
- Tags: Competition, Market Structures, Pricing Policies
- Level: Level 1
- Topic: The Business Environment
- Series: NOV 2019
- Uploader: Dotse