Answer (D) is correct . In an oligopolistic industry, a cartel can be formed to add structure to a market with a few firms. A cartel arises when a group of oligopolistic firms join together for price-fixing purposes. This practice is illegal except in international markets. Prices are fixed at an amount greater than would occur under pure competition. Members of the cartel maintain higher prices by voluntarily restricting output.
Answer (A) is incorrect because Oligopolists do not attempt to decrease demand for the product.
Answer (B) is incorrect because Prices are maintained by restricting output.
Answer (C) is incorrect because Increased costs do not necessarily result in higher prices.
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