Cartel It is notably clear that the modern world economy is subject to the influence of globalization, technological advances, new market strategies, and business aspects. Individuals and corporations are using all means to establish a competitive advantage with a view of surviving and enjoy maximum returns…
Download file to see previous pages...
A cartel includes a secretive agreement between competing parties on total industry output levels, price fixing, credit conditions, and division of profits, bid rigging, discounts, customers, and areas to receive the supply, market shares, and/or businesses to win contracts (“Office of Fair Trading” 1). The main objectives of a cartel agreement are to inflate prices, increase individual profitability, and reduce competition in the industry. Cartels have adverse effects on the industry as they reduce choices, inflate market prices, and inhibit the overall economy (“Australian Competition and Consumer Commission” 1). As such, cartels are illegal in most countries and take place in secrecy where it is not easy to establish their existence. However, a cartel has less influence on an industry than a monopoly. A cartel can be local, national or international where ion the recent times cartels steal billions of dollars from the vulnerable customers every year (“Australian Competition and Consumer Commission” 1). We can classify cartels into public and private cartels. The government takes place in a public cartel where it implements the cartel agreement and defends the cartel from any liability as it seeks to benefits all the citizens. On the other hand, a private cartel is illegal under the antitrust laws as it seeks to benefit only the parties in the cartel agreement to the disadvantage of everybody else. As such, the Competition Act, Article 101 TFEU of the EC Treaty, the Enterprise Act (“Office of Fair Trading” 1), and EU competition law prohibit cartels that allows for price fixing, market sharing, limitation of production or supply or bid rigging (“European Commission” 1). Nevertheless, we still have cartels in the world, which include the controversial Organization of Petroleum Exporting Countries (OPEC), which is the world's largest cartel under the protection of U.S. foreign trade laws. As such, based on my understanding of a cartel, we can experience a cartel in different industries. This is because cartels can actually occur in almost any industry where it involves good or services at the manufacturing, distribution, or marketing levels. However, some industries are more prone to cartels compared to others because of their mode of operations or their organizational structure. Ideally, industries with few competitors, where the products have similar characteristics, where communication channels between competitors are already established, or where the industry is suffering from over supply are prone to cartels (“Office of Fair Trading” 1). More specifically, cartels usually take place in an oligopolistic industry where there are few sellers, barriers to entry, and homogeneous products. Like in most European nations, cartels are illegal in the United States of America. However, although many consider the Organization of Petroleum Exporting Countries (OPEC)as a cartel, the U.S. foreign trade laws protects it claiming it is an global organization with a legal, long-term, and significant objective. Nevertheless, cartels like drug cartels and all naked cartels are illegal in U.S. Notably, various agencies and legislations like the Competition and Consumer Act prohibits cartels under civil law and makes it a criminal offence for individuals and
...Download file to see next pagesRead More
Cite this document
(“Cartel Essay Example | Topics and Well Written Essays - 1000 words”, n.d.)
Retrieved from https://studentshare.org/macro-microeconomics/1488934-cartel
(Cartel Essay Example | Topics and Well Written Essays - 1000 Words)
“Cartel Essay Example | Topics and Well Written Essays - 1000 Words”, n.d. https://studentshare.org/macro-microeconomics/1488934-cartel.
Rival firms in an oligopoly match each other’s price cuts but do not match each other’s price increases. Competition in an oligopoly primarily takes the form of advertising and product differentiation. There are a lot of barriers to entry in an oligopoly like economies of scale, product differentiation and brand loyalty, mergers and takeovers etc (Slomon 174).
The population of the country is 113,724,226 according to a census in the year 2011. Sixty percent of the population in the country comprises of Spanish people followed by Indians form 30 percent of the total population. The demand for independence was put forward in the year 1810 and the country was officially independent by the year 1824.
The drug syndicates have carried so many assassinations and are still killing people to date. The U.S.-Mexico border has made it hard to control drug trafficking between Mexico and the U.S. it is one of the longest border with millions cross over per year.
The author argues that limits by the NCAA play part in importing product quality by sticking to amateurism. The author discovers in his research that the effort by NCAA to restrict payments to athletes results in high degrees of rents coming from entertainment income given by sportsmen and women.
Despite having hundreds of colleges and universities in the United States, monopoly behaviors are evidence in intercollege sports, these cartel features are mainly manifested in intercollege championships. The National Athletic Association (NCAA) has shown explicit effort to limit payments and output for factors of production that is a direct feature of cartel behavior.
Because of the continuous expansion of the geographical borders of the European Union – still under development – the monitoring of commercial activities within the specific region has become extremely difficult. The antitrust
ve made the more connected and as such new globalized world in which State has the lesser role in controlling the affairs of the market and as such markets worked as de-regulated entities.
Functioning of oil markets is considered as one of the most debated topics since past few
They are now the major players in the wholesale of illicit drugs to the U.S (Colleen, 172). According to Stephanie (1), rival Mexican drug cartels have increasingly been involved in violent battles against each other as well as with the U.S and Mexican governments.
National Collegiate Athletic Association regulates inter-college football competitions among other athletic sports. The author criticizes regulatory actions of the NACC as constituting a cartel that makes it hard for weak teams to improve
1 Pages(250 words)Essay
GOT A TRICKY QUESTION? RECEIVE AN ANSWER FROM STUDENTS LIKE YOU!
Let us find you another Essay on topic Cartel for FREE!