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International Cartels and the Economy

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What are international cartels and who benefits and who is harmed by them? Should they be allowed to exist?

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Solution Summary

The solution identifies the harm that international cartel inflect on the economy. The presence of international cartels distorts the natural functioning of the market. It is suggested that be controlled the soonest possible time as trade and commerce are adversely affected.

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Business Dictionary (2012) defined international cartels as "a formal agreement between two or more companies or countries that agree on certain ideas and operate internationally. The cartel will typically agree to coordinate pricing and marketing standards with the intention of gaining a monopoly status".

A cartel is a group of two or more independent sellers who agree to fix or control prices or output in a given market... international cartels are those that have participants from two or more countries (Connor, 2004).
Cartels themselves benefit from their practices to the detriment of legally existing competitors.

Adam Smith labeled them as "conspiracies against the public" (Fear, 2006).
Producers form a cartel with the goal of limiting competition. By restricting output and increasing price, ideally to the price ...

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