Definitions
- Referring to a group of businesses or companies that work together to control and manipulate prices, production, and distribution of goods or services. - Describing an illegal agreement among competitors to limit competition and increase profits. - Talking about a collusive organization that aims to eliminate competition and gain market power.
- Referring to a situation where a single company or entity has exclusive control over the production or supply of a particular product or service. - Describing a market structure with only one dominant seller and no close substitutes. - Talking about a company or organization that has complete control over a specific industry or market.
List of Similarities
- 1Both involve control over a market or industry.
- 2Both can lead to higher prices for consumers.
- 3Both limit competition and can result in reduced choices for consumers.
- 4Both can have negative effects on the economy.
- 5Both are forms of market power.
What is the difference?
- 1Number of participants: A cartel involves multiple businesses or companies working together, while a monopoly refers to a single company or entity having exclusive control.
- 2Legality: Cartels are generally illegal due to their anti-competitive nature, while monopolies can be legal but subject to regulations.
- 3Formation: Cartels are formed through agreements among competitors, while monopolies can occur naturally or be created through mergers and acquisitions.
- 4Extent of control: Cartels aim to manipulate prices and control production and distribution, while monopolies have complete control over the entire market.
- 5Competition: Cartels involve collusion among competitors, while monopolies eliminate competition by being the sole provider in the market.
Remember this!
Cartel and monopoly both involve control over a market or industry, leading to higher prices and limited choices for consumers. However, the difference between cartel and monopoly lies in the number of participants, legality, formation, extent of control, and competition. A cartel involves multiple businesses working together illegally to manipulate prices and limit competition, while a monopoly refers to a single company having exclusive control over a market, which can be legal but subject to regulations.
