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 – It is an agreement which is made by the members of the pool produce a similar product and they want to regularize the price of the product.
- Formation: It is established by the producers to control the production. The pool divides the market.
- Members: Pool is a 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. The motive of the pool is earning profits.
- Field of Activities: Pool is established within the area of any country. The pool eliminates the competition.
- Functions: Pool controls the production of products and keeps the 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 – It is an association of independent producers. The cartel cannot interfere in the internal affairs of the firm.
- Formation: Businesspersons of the same industries come forward to establish a cartel to control the supply of products and to enjoy the monopoly market facilities. The cartel distributes the product.
- Members: Cartel is a combination of sellers.
- Control of production cost: For marketing activities cartel enjoy advantages.
- Nature of combination: Castel is comparatively rigid. The motive of the cartel is the allocation of product it does not control for earning profits for itself.
- Field of Activities: Cartel may expand its area of activities in the local market. The cartel secures monopoly.
- Functions: Cartel influences the market as monopolistic way so that the 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.