What defines a cartel?

A cartel is defined as an arrangement between competing businesses to coordinate their activities, often with the intention of restricting competition in the marketplace. The primary objective of a cartel is typically to control prices, limit production, or divide markets, which negatively impacts consumers and the overall economic environment. This form of collaboration among competitors is illegal in many jurisdictions because it undermines the principles of free market competition and can lead to higher prices and reduced choices for consumers.

In contrast, an agreement that enhances competition would actually be contrary to the nature of a cartel, as cartels work to suppress competition. Arrangements for sharing profits among competitors suggest collusion, and while this might seem innocuous, it usually forms part of a cartel's activities. A legal framework for fair business practices is generally aimed at preventing such anti-competitive behaviors as cartels rather than facilitating them.

Thus, the definition focusing on a non-competitive agreement between businesses captures the essence of what constitutes a cartel, making this the correct choice.