prepdream
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#1
Report Thread starter 6 years ago
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hi, I am trying to answer these two questions:
-Why is a cartel sometimes regarded as artificial monopoly?
-Would the OFT be needed if there is a sufficiently competitive environment?

Quite stuck at the moment so I would appreciate if anyone can help me on these questions. Thanks a lot!
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Simes
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Report 6 years ago
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A cartel is when a group of companies who should be competing get together secretly to fix prices. For example. Sainsbury's, Tesco, Asda, Dairy Crest and others were fined £116m for fixing diary product prices between 2002 and 2003. It has the same effect on the economy and consumer as if there was a monopoly.

How can there be a sufficiently competitive market without there being an organisation monitoring the market to make sure it is competitive? If the OFT did not exist, it would need to.
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