2. What is cartel ?
Types of cartel.
Facts of cartel.
How cartel fail.
How cartel success.
How cartels causes inefficiencies in the market.
Cheating.
Market sharing cartel.
OPEC.
Conclusion.
3. A cartel is an organization created from a
formal agreement between a group of
producers of a good or service to regulate
supply in order to regulate or manipulate
prices.
A group of parties ,nations or factions united in
a common cause.
5. Maximum profit Source of power
formerly independent
companies who overtly
agree to work together.
Objectives of cartels are
to increase their profits
or to stabilize market
sales . They do this by
fixing the price of goods,
by limiting market supply
or by other means.
6. Cartels are created when a few large producers
decide to co-operate with respect to aspects of
their market. Once formed, cartels can fix
prices for members, so that competition on
price is avoided. ... Restricted output –
members may agree to limit output onto the
market, as with OPEC and its oil quotas.
9. Cheating can be detected and prevented
Low organizational cost
Cartel should have complete market control
Low expectation for serve government
10. High entry barriers
when the country’s sovereignty is at
stake.
when one of the members has complete
control over the market.
Less number of competitors drives the
market prices .
11.
12. Provides monopoly
Products can be sold at higher margins
The cost of advertising is reduced
Production efficiency.
Reasonable margin.
Big savings.
No individual role
13. Individual monopolies affect disposable
incomes of customers.
Create Inefficiencies in the market
full regulation over the member
No motivation
Demand will fluctuate
The individual members are not able to scale up
The distribution of profits is decided by the central agency
of the cartel.
14. Protected by US OPEC 12 PARTNERS
OPEC the world Largest
cartel
Mechanism for
implementing
production restriction
15. PSMA
Pakistani sugar mill
association
Create an illegal
monopoly
Enforce high level of
fake prices for sugar
16. Cartel is a market type structure
Cartel is illegal
The only legal cartel in the world is OPEC
Cartel mostly fail because firms don’t cooperate
due to lack of interest
17. Cartel agreements are unstable
Once a cartel broken, it may incentive to
reform or return in old condition
Cartel do not abolish competition but
regulate it.
Cartel is not much beneficial for customer or
household.
