Discussion
Cartel is a type of ...............
Answer: C
A cartel is a type of horizontal combination.
A horizontal combination unites firms at the same stage of production in the same line of business, such as several cement makers. A cartel is an association of such independent firms that agree to fix prices, limit output, share markets or allocate quotas, so as to reduce competition among themselves while keeping their separate identities. OPEC is the best-known international example.
A vertical combination joins firms at successive stages of production, such as a steel mill and an iron ore mine. An allied (lateral) combination joins firms making related but different products, and a mixed combination joins unrelated businesses. A cartel brings together competitors in the same line, so it is horizontal.
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