Final answer:
The formal agreements between companies to work together and eliminate competition, effectively acting as a monopoly, is known as a cartel.
Step-by-step explanation:
Formal agreements between companies that aim to eliminate competition from the market by deciding together both the quantity of product to produce and the price to charge, thereby acting similarly to a monopoly, are referred to as cartels. These firms are in collusion to control output and maintain high prices, pursuing mutual benefit over competitive practices. This is particularly prevalent among oligopolies - market structures dominated by a few large firms - where these agreements become essential to restrict output and increase profits akin to a monopolistic entity.