Define "price fixing".

• A. An agreement to sell products for less than market value
• B. A legal contract among companies regarding pricing
• C. A cartel agreement to set prices at a specific level
• D. A method used to determine the highest price consumers will pay

Answer: (C)

Price fixing refers to an agreement among competing firms to set a specific price level for their products, rather than letting the prices be determined by market forces such as supply and demand. This practice can take the form of explicit agreements between companies or implicit understandings where competitors align their prices to avoid competition and maximize profits.

In the context of business and economics, price fixing undermines the principles of free market competition, as it restricts price competition, leading to higher prices for consumers and limiting choices. It is often facilitated by cartels, which are groups of independent companies that collude to control prices and market supply.

The other choices address different situations but do not accurately define price fixing. Selling products for less than market value relates to discounting practices, whereas a legal contract regarding pricing lacks the nefarious intent and illicit collusion characteristic of price fixing. Determining the highest price consumers will pay pertains more to pricing strategy than to the unlawful coordination of prices that defines price fixing.