Give The Advnatages And Disadvantages Of Cartels?

Advantages of Cartels:-
1) The member units in the cartel do not lose their identity.
2) It is more stable than pool.
3) The members can reduce the cost of production with efficient organization structure.
4) The members can earn monopoly profits if the market bears it.
5) The firms have not to incur expenditure on publicity.
6) It is economical to market the commodities as a single seller.
7) The cartel is better market condition as compared to the competing firms which often resort to undercutting.

8) The inefficient firms are able to keep its head above water in cartel as they have not to face any competition.
Disadvantages of Cartel:-
1) The cartel like the pools has proved to be ineffective organization.
2) The procedures of different firms are not able to maintain uniformity in producing standard products.
3) The customers are charged higher prices and the wealth gets concentrated in few hands only.
4) The companies which don't join cartel and fall in the same line of the business create competition for its members.
5) The high profits earned by the syndicate encourage the growth of new firms in the country who mostly compete with cartel in the sale of goods.

There are many advantages and disadvantages of Cartels and given below are some of the demerits.

The main disadvantage of cartel is that, it is created by pooling of companies and the procedures and the standards of companies are different from each other. This may create the conflicts among the pooled companies later on. Consequently, conflicts results in inefficiency. Secondly, prices of the specific product in the industry are increased and in this way the wealth is concentrated only in few hands. Thirdly, the companies which are not a part of cartel can result in competition for the cartel. In a cartel the overall benefit of consumers is decreased.