Cartel

Cartel

A group of businesses or nations that act together as a single producer to obtain market control and to influence prices in their favor by limiting production of a product. The United States has laws prohibiting cartels.

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Cartel

A small group of companies or governments that regulate the price of a good or service by having total or near total control of a market. Suppose four airline companies control 98% of the market share for passenger flight. If these four companies formed a cartel they could agree to set prices together, which would guarantee profits for all companies because it is extremely unlikely that a fifth company would be able to successfully undercut them. A prominent example of a cartel of governments is OPEC, which effectively can set the price of a barrel of oil by mandating quotas for each company to follow and thereby controlling supply. See also: Price collusion.

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cartel

A group of companies or countries acting together to control the supply and price of certain goods or services. Cartels are formed to produce higher profits than would ordinarily be earned.