Question

Cartels are a form of monopoly.

TRUE OR FALSE

Answer 1

Solution: "Cartels are a form of monopoly." (TRUE)

Explanation: "Cartel" can be defined as a group of firms that make a group together to make output and price as per their decided choices. Cartels tend to arise in markets where there are few firms and each firm has a significant market share.

However, In Monopoly, only one firm is in the market and that firm is able to set its own quality standards and establish selling prices.

In Cartel, the group of firms strives for maintaining their industry’s monopoly position include the fixing of prices, the allocation of sales and productions. Hence, "Cartel" is a kind of "Monopoly", as it also tries to remove competition but the only difference is it makes a group of firms.

(Please provide your valuable feedback. Thank You)