Chapter 64, Problem 3MCQ

To determine

To state: The term used for an agreement among producers to restrict output and increase profits.

Answer to Problem 3MCQ

The correct option is D i.e cartel

Explanation of Solution

A cartel is defined as a group of producers that agree with each other to restrict the output to increase the prices and thus increase the joint profits.

This is generally done to control the prices and limit the competition.

So, an agreement among several producers to restrict output and increase profit is known as a cartel.

Economics Concept Introduction

Introduction:

Cartel: is defined as a group of producers that agree with each other to restrict the output to increase the prices and thus increase the joint profits.