Cartels pose a threat to consumer welfare from "summary" of The Antitrust Paradox by Robert Bork
Cartels are detrimental to consumer welfare due to their ability to restrict competition and raise prices. When firms engage in cartel behavior, they effectively eliminate the benefits of competition, such as lower prices and increased innovation. This harms consumers by limiting their choices and forcing them to pay higher prices for goods and services. By colluding with one another to set prices or allocate markets, cartel members are able to artificially inflate prices and reduce output. This results in a transfer of wealth from consumers to producers, as consumers are forced to pay m...
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