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Cartel: A Cartel is a formal agreement among participates in a market system. Cartels usually occur in an oligopolistic industry. Cartel members may agree on such matters as price fixing, total industry output, market shares, allocation of customers, allocation of territories, bid rigging, establishment of common sales agencies, and the division of profits or combination of these. The aim of collusion is to increase individual member's profits by reducing competition. Free Market System: A Free Market System is a market in which prices of goods and services are arranged completely by the mutual consent of sellers and buyers. By definition, in a free market environment buyers and sellers do not coerce or mislead each other nor are they coerced by a third party. Free markets contrast sharply with controlled markets or regulated markets, in which governments directly or indirectly regulate prices or supplies, distorting market signals. In a free market, through competition between vendors for the provision of products and services, prices tend to decrease, and quality tends to increase.
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