What is the primary goal of a cartel in an industry?

A cartel is a formal agreement among competing firms to control prices or exclude entry of a new competitor in a market. It is a form of collusion.

• "To maximize individual firm profits": While individual firms join a cartel to increase their profits, the cartel's collective action is aimed at controlling the market, which then allows for higher profits for its members. This is an outcome, but not the primary mechanism or goal of the cartel's formation.
• "To increase production efficiency": Cartels generally do not focus on increasing efficiency. In fact, by reducing competitive pressure, they can sometimes lead to less efficiency.
• "To eliminate competition by fixing prices": This is a core function and primary goal of a cartel. By agreeing on prices, members avoid price wars and maintain higher prices, effectively eliminating price competition among themselves. This leads to higher profits for the cartel members as a whole.
• "To promote innovation": Cartels typically do not promote innovation. Reduced competition often lessens the incentive for firms to innovate.

The most direct and primary goal of a cartel is to eliminate competition, often through price fixing, to gain market power and increase collective profits.

The correct option is To eliminate competition by fixing prices.

The final answer is $\boxed{\text{To eliminate competition by fixing prices}}$