Which of the following statements is true for cartels?
A) Their purpose is to try to control prices through control of the output.
B) They are prohibited under §2 of the Sherman Act.
C) They are most successful when they have a large number of members.
D) They are a way to attain vertical price fixing.

Question

Quizplus · Accepted Answer

One way to attain price fixing is to form a cartel. Cartels are prohibited under §1 of the Sherman Act. Cartels are most successful when there are just a few members in the cartel, the cartel can raise prices without affecting the consumer's buying habits, and the members of the cartel have no reason to stray outside of the agreement. The purpose of a cartel is to try to control prices through control of the output.

Which of the Following Statements Is True for Cartels