Q. With reference to cartelisation, consider the following statements:
1.Cartelisation undermines overall economic efficiency and innovations.
2.Competition Commission of India is responsible for restricting cartelisation.
Which of the statements given above is/are correct?
Answer: C
Notes:
Both statements are correct.
Competition Commission of India is responsible for restricting cartelisation. According to the Competition Commission of India, a “Cartel includes an association of producers, sellers, distributors, traders or service providers who, by agreement amongst themselves, limit, control or attempt to control the production, distribution, sale or price of, or, trade in goods or provision of services”.
The International Competition Network defines a cartel as “an agreement between competitors to restrict competition”.
Cartel raises the price above the competitive level and reduces output. Further, it undermines the overall economic efficiency and innovations.
Source: PIB
