Question

Why didn’t Mexico join OPEC? a.    Mexico was never asked to join b.    Mexico wanted to...

Why didn’t Mexico join OPEC?

a.    Mexico was never asked to join
b.    Mexico wanted to join, but it was not an Arab country and its membership request was denied
c.    Mexico did not want to offend the U.S.
d.    Mexico decided not to join because it could get all of the benefits of the cartel without having to put up with the cost and obligations of cartel membership
e.    Mexico did not produce enough oil to make membership worthwhile

Homework Answers

Answer #1

Mexico decided not to join because it could get all benefits of cartel without having to put up with the cost of cartel membership.

( OPEC is a cartel. Members of OPEC have a coordinated energy policy. But the members aren't allowed to take independent decisions regarding output and price . For example, by restricting output , members managed to quadruple the price of oil in 1974. Even now, output levels are assigned for each member.

Mexico do produce enough oil to take OPEC membership . Countries other than Arab countries are also allowed to became a member of OPEC. Mexico didn't want to join because of the obligations OPEC places on its members regarding price and output. )

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