Question

why oil market is monopoly

why oil market is monopoly

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Oil market is controlled mainly by the OPEC (Oil producing and exporting countries). There are two reasons behind thus monopoly:

i. Geographical reasons: Oil is a natural resource which is extracted only in specific locations around the world. Due to this, the countries which control oil feilds can behave as monopolies as oil is a necessity and there are only few players in the market.

ii. Formation of cartels: OPEC is the cartel formed by the oil producing and exporting counties. Due to the formation of the cartel, these countries are able to control the price and quantity of oil and hence behave as a monopoly power.

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
Is monopoly desirable in a market economy? Why or why not?
Is monopoly desirable in a market economy? Why or why not?
Daisy Duck has a monopoly in oil refinement in the local market. The demand for Daisy’s...
Daisy Duck has a monopoly in oil refinement in the local market. The demand for Daisy’s oil is: P = 65 - q.The relevant marginal revenue function is MR(q) = 65 - 2 · q. Her marginal cost function is MC(q) = 8. In the refinement of oil, she emits pollution that has the marginal external cost function: MEC(q) = 2. What level of output will Daisy select to maximize profits? What is the marginal social cost of Daisy’s profit?...
Whether a market is competitive or a monopoly is determined by its degree of market power....
Whether a market is competitive or a monopoly is determined by its degree of market power. In the real world, pure competition and pure monopoly do not exist—the real-world market falls somewhere between the two extremes. Why then do you think we study perfect competition and monopoly? What is the closest you have seen or experienced to pure competition or monopoly? Which do you think is preferable? Why?
Which of the following best describes why a monopoly market structure is not allocatively efficient? a)...
Which of the following best describes why a monopoly market structure is not allocatively efficient? a) The monopolist restricts production, resulting in the MSB being less than the MSC b) The monopolist restricts production, resulting in the MSB being greater than the MSC. c) In the presence of a monopoly there exist negative externalities in production d) In the presence of a monopoly the demand curve no longer represents MSB
1) Describe Monopoly market 2) List and explain Pricing Strategies within Monopoly market
1) Describe Monopoly market 2) List and explain Pricing Strategies within Monopoly market
Distinguish between a Monopsony Market and a Monopoly Market.
Distinguish between a Monopsony Market and a Monopoly Market.
Compare and contrast the key attributes of perfect competition and monopoly. Give examples of both market...
Compare and contrast the key attributes of perfect competition and monopoly. Give examples of both market structures (be creative). Explain why monopoly is less socially efficient than perfect competition. If monopoly is less socially desirable, why does the government allow monopolies to exist? Explain.
3. Define the monopoly market power problem. Why is this a problem? 4. Draw a two-panel...
3. Define the monopoly market power problem. Why is this a problem? 4. Draw a two-panel model (graph) for a firm producing and selling good X in a purely competitive market. In the first panel show the market for good X; in the second panel show the firm in long run equilibrium. ·         Show the effects of an increase in demand for good X in this market. Show the effects of a decrease in demand for good X in this...
Give an example of a monopolistic market/firm or a dominant firm (market). Clarify which type (monopoly...
Give an example of a monopolistic market/firm or a dominant firm (market). Clarify which type (monopoly or dominant firm) your example fits and why. Identify and briefly discuss the barriers to entry for the market in your example. Be specific.
Differences in competitive market vs. monopoly and oligopoly market environments.
Differences in competitive market vs. monopoly and oligopoly market environments.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT