QS Study

Differences between Pool and Cartel

Cartel means an alliance of producers who combine together retaining their identities for the purpose of pursuing a monopolistic policy in their joint efforts. On the other hand, the pool is a working agreement that is based upon a definite contract is usually in writing, and frequently provides penalties for violation of their terms and conditions of the agreement. So there are various differences between cartel and pool. The differences between cartel and pool are given below:

Pool

  • Formation: It is established by the producers to control the production.
  • Members: Pool is the combination of producers.
  • Control of production cost: Purchasing raw materials, employ workers in these sectors it enjoys privileges.
  • Nature of combination: Pool is a flexible organization.
  • Field of Activities: Pool is established within the area of any country.
  • Functions: Pool controls the production of products and keeps market favorable to the producers of the products.
  • Distribution of profit: In the cases of the pool the organization distributes profit by the quota.
  • Types: Pool may be defined as the production of profit, patent, mixed etc in this way.

Cartel

  • Formation: Businesspersons of same industries come forward to establish a cartel to control the supply of products and to enjoy the monopoly market facilities.
  • Members: Cartel is the combination of sellers.
  • Control of production cost: For marketing activities cartel enjoy advantages.
  • Nature of combination: Castel is comparatively rigid.
  • Field of Activities: Cartel may expand its area of activities in the local market.
  • Functions: Cartel influences the market as monopolistic way so that organization makes a combination.
  • Distribution of profit: Cartel distributes its profit among the members proportionally.
  • Types: Cartel may be of different kinds such as price fixing, Output cartel, Terme Cartel, Zone cartel etc.