Final answer:
An oligopoly is a market dominated by a few firms making similar products or services, and when these firms formally collude, it is termed a cartel.
Step-by-step explanation:
The term that best describes a group of firms all making similar products or similar services is oligopoly. An oligopoly is a market dominated by a few firms making similar products or services, and when these firms formally collude, it is termed a cartel. An oligopoly occurs when just a few firms dominate the market, significantly influencing the price and production of goods or services. These firms may work to differentiate their products to gain market power. When these oligopolistic firms collaborate formally to control prices and restrict competition by producing the monopoly output and sell at the monopoly price, this cooperation is known as a cartel, which is a form of collusion and often considered illegal.