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26 February, 01:25

Three companies, Optimax, Megachug, and Thirstoid, each with about the same market share, dominate the sports drink market. In an attempt to increase profits, the three companies coordinate their actions and agree to restrict their collective output of sports drinks, thereby increasing the price of sports drinks in the market. This is an example of:A price warPrice leadershipA cartel

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  1. 26 February, 02:43
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    Answer: A cartel

    Explanation: In simple words, cartel is the arrangement done between two competing producers in a market to maintain high prices and restricting competition. These are done by the firms merely to protect their own interest.

    In the given case, these three companies were coordinating their business activities to protect their profits, hence it is clearly an example of a cartel.
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