What is defined as a cartel?

A cartel is characterized by an agreement between businesses to avoid competing with one another, often by fixing prices, limiting production, or dividing markets. This form of collaboration is typically illegal in many jurisdictions as it undermines the principles of free-market competition, leading to higher prices and restricted choices for consumers. By coordinating their actions, businesses in a cartel can create a controlled market environment, benefiting themselves at the expense of market fairness and consumer rights.

In contrast, the other options misrepresent the nature of a cartel. An informal agreement among competitors lacks the formal structure that defines a cartel, and an organization promoting fair market practices would typically work against the formation of cartels. Lastly, a regulation preventing market monopolization pertains to laws designed to promote competition and prevent such collusion, making it antithetical to the idea of a cartel.