Cartels really affect how competition works and set prices in certain markets. Let’s break this down:
Price Control: Cartels keep prices high by producing less. A good example is OPEC, which controls about 40% of the world’s oil. This means they have a big say in oil prices.
Strong Market Position: When cartels work together, they gain a lot of power in the market. It’s like they’re working as one big company, almost like a monopoly.
Making Big Profits: Cartel members usually make a lot more money together than they would if they were competing. They set their prices higher than what it costs to make a product, which can hurt consumers. For example, in 2018, the total profit for global cartels was more than $100 billion!
Cartels really affect how competition works and set prices in certain markets. Let’s break this down:
Price Control: Cartels keep prices high by producing less. A good example is OPEC, which controls about 40% of the world’s oil. This means they have a big say in oil prices.
Strong Market Position: When cartels work together, they gain a lot of power in the market. It’s like they’re working as one big company, almost like a monopoly.
Making Big Profits: Cartel members usually make a lot more money together than they would if they were competing. They set their prices higher than what it costs to make a product, which can hurt consumers. For example, in 2018, the total profit for global cartels was more than $100 billion!