Question

Why cartels like OPEC fail to reach to consensus on price and quantity?

Why cartels like OPEC fail to reach to consensus on price and quantity?

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

The Organization of Petroleum Exporting Countries (also termed to be OPEC) are categorised to be example of cartel as a type of oligopoly. The governments in the OPEC will agree on the coordination with petroleum firms (inclusive of both the private as well as the state owned) in the manipulation of the global oil supply and its price. However the individual profits can be gained by the firm who would be cheating on their cooperative agreement. In the long run the cartels the consensus on price and quantity would be likely to be unstable due to the inherently instability of cooperative agreements on price and quantity among the members of cartel.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Read the following paragraphs to answer the question Why cartels like OPEC fail to reach to...
Read the following paragraphs to answer the question Why cartels like OPEC fail to reach to consensus on price and quantity? When markets were collapsing as the coronavirus pandemic crushed demand in March and early April, the idea that crude could rise again to $40 a barrel was “a dream,” the energy minister of the United Arab Emirates, hhSuhail Al Mazrouei said during a conference call on Monday. That was before the OPEC+ alliance agreed unprecedented cuts in output. Prices...
Explain why cartels are naturally unstable. Do these factors explain the decline of OPEC as an...
Explain why cartels are naturally unstable. Do these factors explain the decline of OPEC as an international cartel?
Which of the following is true about cartel behavior? (a) Cartels typically restrict quantity and lower...
Which of the following is true about cartel behavior? (a) Cartels typically restrict quantity and lower price to the detriment of consumers (b) Cartels must find a way to restrict entry into their business or their rents will be dissipated (c) Cartels typically increase quantity to flood the market with goods, harming consumers (d) All of the above
Suppose that Saudi Arabia lets other members of OPEC sell all the oil they want at...
Suppose that Saudi Arabia lets other members of OPEC sell all the oil they want at the existing price which the Saudis set and other members accept. The daily world demand for OPEC oil is given by: P = 88 – 2Q where P is the price per barrel of oil and Q the total quantity of OPEC oil (in millions of barrels per day). The supply function for other members of OPEC who behave like a “competitive fringe” is...
Explain the law of demand, and why as price increases quantity demanded decreases; and, as price...
Explain the law of demand, and why as price increases quantity demanded decreases; and, as price decreases, quantity demanded increases? If taxes were more progressive, would total output be affected?
Explain why a decrease in price leads to an increase in quantity demanded for a normal...
Explain why a decrease in price leads to an increase in quantity demanded for a normal good. Name the terms describing what is happening and explain their meaning.
What is the difference between an indicative price like LIBOR and a transaction price like the...
What is the difference between an indicative price like LIBOR and a transaction price like the S&P 500 and why is it important?
What is the difference between an indicative price like LIBOR and a transaction price like the...
What is the difference between an indicative price like LIBOR and a transaction price like the S&P 500 and why is it important?
Why are price changes more costly to make compared to quantity changes? How important are signals...
Why are price changes more costly to make compared to quantity changes? How important are signals in the market in deciding price and quantity changes? What reliable signals is this firm getting?
1. Explain the impact of following on equilibrium price and quantity a. Corona Virus spreading in...
1. Explain the impact of following on equilibrium price and quantity a. Corona Virus spreading in China has reduced the demand for travel. Evaluate the impact on Gasoline. b. In response, OPEC has decided to cut production. Evaluate the new impact on Gasoline. c. Price of fertilizer on corn increases. Evaluate the impact on corn. d. Teens have discovered an exciting new app on smart phones. Evaluate the impact on smartphones. 2. a. Estimate the consumer surplus and produces surplus...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT