Question

In critical essay The first part of the question ask you discuss dynamic evaluating of OPEC as a powerful organizations and trading community . This part of question can be answered by trying to answer the following sub questions :

1- What is a cartel ?

2- Briefly discuses the rise of performance of OPEC as a powerful organization in the 1970 specially the oil embargo on USA

3-What is the main challenges OPEC has faced in the last 10 years ?you can start from 2001

4-Diescuss some of the main effect of the challenges faced by OPEC and its member countries over the referenced time

Answer 1

1.Cartel is a type of market structure, it occurs when 2 or more companies (usually monopolies) collude and work together to control the market. Since most of these companies are monopolies, they have a significant amount of market power, so they tend to behave like monopolies, except they are multiple players in the market. Cartels want to reduce the quantity offered on the market and raise prices, but as there are more players in the market, everyone must agree on the quantity of goods to be produced.

Currently, the only legal cartel in the world is OPEC, cartels are illegal in economies due to their anticompetitive methods they use for profit. Most countries have monopoly vigilantes and antitrust laws to prevent cartel formation.