What's the first thing that pops into your mind when you hear the word "cartel"? I'm betting (because that seems to be all the rage around here today) that the first thing you think of is OPEC. If asked to define OPEC, I'm betting you'd say Saudi's, oil, money or something quite similar.
Tonite Keith referred to the insurance companies as a cartel. Hmmmm, what is the definition of "cartel"?
Cartel Definition Definition of a Cartel. A cartel occurs when 2 or more firms enter into agreements to restrict the supply or fix the price of a good in a particular industry.
One of the most famous cartels in the world is OPEC Organisation of Petroleum exporting countries. In the 1970s, OPEC was able to triple the price of oil in response to events in the Middle East. They could do this because they controlled over 70% of the world's oil supply.
Cartels in the UK
In the UK cartels are an example of restrictive trade practices and are outlawed. Firms may still try to tacitly collude and avoid formal cartels.
Breakdown of Cartels
Cartels tend to breakdown because firms have an incentive to cheat on their quotas and benefit from high prices and high output.
Would a good acronym for the cartel be POOP, for PayOuts, Oh Boy.
Or maybe it would be SUM, for Screw You Mother....s.
Perhaps OPUS, for Oh Puhleeze You Suckers, would work.
Get those creative juices flowing and come up with a good one that we can use forever more.
One more! SUNS for Shut Up Nyceve & Slinkerwink