The cartel is a monopoly of firms

A cartel is an association of several firmsworking in the same industry, in order to regulate prices, terms of sale, spheres of influence, production volumes, use of patents, hiring workers, conditions for the sale of goods. It can be attributed to the most simple monopoly unions. Firms participating in the association, retain their legal, industrial, financial and commercial independence.

The agreement of a large number of enterprises of oneThe industry is, in essence, the cartel. The definition of this concept was known several centuries ago. In Western countries, such activity of companies is considered an economic crime; therefore, antitrust legislation actively fights cartel members, revealing illegal associations. But in some states, such associations thrive and even are encouraged by the government to standardize materials, restructure industry and restrict competition between small businesses.

In order to profitably distribute the market,increase product prices, establish a minimum wage, entrepreneurs and create a cartel. This agreement should sign as many participants as possible to eliminate potential competitors. Inside cartels, large firms dictate their conditions to be smaller and unprotected, and do not allow parties to an agreement to lower prices for goods.

In countries with market economies such associationsexist in a hidden form, because antitrust laws do not allow the emergence of such activities. There are import, export, domestic and international agreements. The simplest is the inner cartel. This is an association of enterprises of the same industry within the country. International implies joint activities of firms from different countries engaged in import and export of products. Import cartels are importers of foreign goods, and export ones are associations of national exporting companies.

Чтобы не попасть под действие антимонопольного legislation, such a monopoly association became known as gentlemen's agreements, convention, ring or corner, but the essence remains the same. There are cartels in Russia in almost every industry, and this has a negative effect on pricing. Experts note that if there were no agreements between manufacturers, prices would have decreased by 2-2.5 times.

Most often, monopoly can be traced amongoil companies, in the telecommunications market, among manufacturers of drugs, food, coal, etc. The government is doing everything possible to eliminate the cartels, but it is very difficult and almost impossible to close all the loopholes. Therefore, the most effective method of dealing with unscrupulous entrepreneurs is to encourage competition.

The cartel is relatively short-lived.unification, because after some time conflicts start between the participants, the balance is broken. The stability of the agreement depends on the possibility of including or eliminating outsiders, the lack of forces undermining the cartel from the inside.