What is the name given to a group of firms that work together to control the market price of goods?

A group of firms that collaborate to control the market price of goods is known as a cartel. A cartel is formed when firms agree, either explicitly or implicitly, to limit competition among themselves in order to maximize their joint profits. This often involves setting production quotas, fixing prices, or dividing markets. The primary aim of a cartel is to establish higher prices than would be possible in a competitive market, thereby increasing the members’ economic profits.

In the context of economic theory, cartels are typically associated with oligopolistic markets where a few firms hold significant market power. By cooperating, these firms reduce the uncertainty of competition, leading to outcomes similar to those that would arise if there were a monopoly.

The other terms do not accurately describe this structure. A trust usually refers to a legal arrangement or an organization that manages the assets and liabilities of companies, often in a way that can include monopolistic practices but is not specifically about price control. A syndicate generally refers to a group of individuals or firms coming together for a particular project or transaction, often in finance, and is not focused on ongoing market control. A joint venture involves two or more companies creating a new business entity, sharing resources and risks, rather than coordinating to manipulate market prices. Thus,