Profit is equal to zero. At equilibrium output the firm is producing as much as it is capable of producing. Externalities lead to a market solution in which resources are not allocated according to their best use. Externalities often exist when property rights are poorly or incompletely defined. Externalities result in a quantity produced that is not the optimal quantity.
Cartels can be successful or unsuccessful.
For example, if a cartel breaks apart due to the actions of its members it is unsuccessful. Firms in the industry should be producing a very similar product. There should be a large number of firms in the industry. The industry demand curve for the good being produced must be highly elastic. Externalities must be positive.