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23 June, 14:53

Suppose the only three existing manufacturers of video game players signed a written contract by which each agreed to charge the same price for products and to distribute their products only in the geographical area assigned them in the contract. This best describes:

A) cost-plus pricing.

B) multiproduct pricing.

C) a cartel.

D) price leadership.

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  1. 23 June, 17:30
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    Option C, The given best describes Cartel

    Explanation:

    A consortium is a group of large companies collectively consenting to work for the defence of their rights. Cartels control retail supplies and manipulate prices. The cartel functions as one group once it has formed. The goal is to increase each member's earnings.

    The three firms were combined and assigned to regional markets. Every business in its designated space will have complete market influence. The cartel decided to limit the market split in market supply in jurisdictions or regions of order to maximize the gain.

    Through suppressing demand, by not reducing prices or by deciding to reduce the supply of the goods or services, the conventional cartel can control prices.
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