What term is used to describe a formal agreement among competing firms to coordinate their actions?

The term "cartel" refers to a formal agreement between competing firms to coordinate their actions, often to control prices, limit production, or share markets. This arrangement typically allows the firms involved to gain market power, reduce competition, and increase their profits collectively, even though such collusive behaviors are usually illegal in many jurisdictions due to antitrust laws.

In the context of economic structures, while an oligopoly describes a market dominated by a small number of firms, it doesn't inherently imply that those firms are cooperating or colluding. A monopoly, on the other hand, refers to a single firm dominating the market without competition, which does not involve coordination among multiple firms. A trust is similar to a cartel in that it involves multiple firms, but it specifically refers to a legal entity that combines several companies under one management to control a market. However, the broader and more commonly recognized term for the cooperative agreement among competing firms is indeed 'cartel.'