For example, if Nigeria decides to lower prices and sell more oil, Saudi Arabia will not be able to sue Nigeria and force it to stop. The optimal outcome for companies is conflict (high price, high price) However, it depends on the incentive to collide in the United States and in many other countries, it is illegal for companies to agree because the agreements are anti-competitive behavior, which constitutes a violation of antitrust rules. The Department of Justice`s Department of Understanding and the Federal Trade Commission are both responsible for preventing cartels in the United States. Lysin, an industry worth $600 million a year, is an amino acid used by farmers as an additive for animal feed to ensure the good growth of pigs and poultry. Lysin`s main U.S. producer is Archer Daniels Midland (ADM), but other major European and Japanese companies are also present in this market. For a time, in the first half of the 1990s, the world`s largest lysine producers gathered in the hotel`s thinking rooms and decided exactly how much each company would sell and what it would ask for. However, the Federal Bureau of Investigation (FBI) drew attention to the cartel and conducted wiretaps and meetings. The differentiation of products, which are at the heart of monopoly competition, can also play a role in the creation of the oligopoly. For example, companies may have to reach a certain minimum size before they can spend enough on advertising and marketing to create a recognizable brand. The problem of competition with, say, Coca-Cola or Pepsi, is not that making fizzy drinks is technologically difficult, but that it is a huge task to create a brand name and marketing efforts to assimilate coke or pepsi. Since oligopolists cannot support a legally enforceable contract as a monopoly, companies can instead closely monitor what other companies produce and calculate. Explain the difference between a monopoly and an oligopoly and a cartel.
In a monopoly, there is only one company that supplies certain products/goods. In the case of an oligopoly, there are few sellers. In oligopoly, sellers remain aware of the actions of other sellers. Their decisions are influenced by those of others. In an oligopoly, there is no formal agreement between companies. An agreement is an agreement between competing companies. It is a formal agreement between producers or producers to set prices and the quantity produced. When oligopoetic companies think about the quantity to be produced and the price to pay, they are tempted to work with other companies to assert that they are a single monopoly.
Common measures allow oligopolistic companies to maintain industrial production, demand a higher price and share profits. When companies work together in this way to reduce production and keep prices high, this is called collusion. A group of companies that have a formal agreement on monopoly production and monopoly selling is referred to as an „agreement.“ The problem with notification is finding solid evidence of collusion. Cartels are formal agreements. Because cartels provide evidence of collusion, they are rare in the United States. Instead, most agreements are implicit, in which companies implicitly recognize that competition is bad for profits. Perhaps the simplest approach for collusant oligopolists, as you can imagine, would be to sign a contract together, that they keep production low and keep prices high. If a group of U.S. companies signed such a contract, it would be illegal.
Some international organizations, such as the member countries of the Organization of the Petroleum Exporting Countries (OPEC), have signed international agreements to act as a monopoly, maintain production and maintain high prices so that all countries can reap high profits from oil exports. However, such agreements are not legally applicable because they are in the shadow of the droi