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Cartel

A cartel is a group of producers whose goal is to fix prices and limit supply. Cartels are illegal in most countries, however they do exist internationally. In general, cartels are economically unstable in that there is a great incentive for members to cheat and to sell more than the quotas set by the cartel. This has caused most cartels which attempt to set the prices of raw materials to be unsuccessful. A rare exception to this involved petroleum and OPEC. Another exception is the DeBeers diamond cartel.

Many trade organizations[?], especially in industries dominated by only a few major companies, have been accused of being fronts for cartels.

See also drug cartel.



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