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Cartel

An agreement between two or more firms in the same industry to fix prices at a high level or to restrict output in an effort to increase profits by reducing competition. Members of cartels face a strong incentive to break the agreement by lowering prices in order to undercut other members, thereby gaining all the profit. They are also threatened by new entrants into the market who could undercut the prices of the cartel. Consequently, it is rare to find a stable cartel in a free-market system economy.

The Truth About Monopolies and Anti-Trust Laws

 

 

Mark Hendrickson - Monopoly and Anti-Trust

 

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November 2014

It's been 40 years since F. A. Hayek received his Nobel Prize. His insights, particularly on the distribution of knowledge and the impossibility of economic planning, remain hugely important today. In this issue, we look back on the influence of his work. Max Borders and Craig Biddle debate whether liberty must be defended from one absolute foundation, further reflections on Scottish secession, and how technology is already changing our world for the better--including how robots, despite the unease they cause, will only accelerate this process.
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