Opec Cartel; Price Setter or Price Taker

The OPEC engagement: monetary value setter or cost taker? dining table of contents PageContent 2Table of contents 3I.Introduction 3II.The undesirability of a cartel 4III.The 1973 embrocate crisis 5IV.2000s energy crisis 7V.Conclusion 8References I.Introduction The Organisation of Petroleum export Countries(OPEC) is the worlds most famous cartel. In the wee 1960s some(a) of the most anele-rich countries nationalised the oil facilities that were previously in the manpower of enlarged western companies. These countries agreed to devise ways and content of ensuring the stabilisation of prices in international oil trade places with a view to eliminating calumnious and unnecessary fluctuations.(OPEC, 2008). Although this might seem to be a august statement, OPEC is often accused of manipulating the commercialise in their own interest. That OPEC would ascertain the market does not seem to be awkward si nce the conception of forming a cartel is to exercise market power by pushing prices higher(prenominal) than they would be nether market conditions and therefrom reap profits(Gülen, 2007). The question that follows is: who is correct and who is wrong?

This dish out might seem pellucid taking into consideration OPECs best-known actions, or actions that argon attributed to OPEC, such as the 1973 oil embargo and its part in the oil glut in the 1980s. The paper examines whether or not the behaviour of OPEC can be seen as the behaviour of a cartel. First, this paper shows why a cartel is not coveted according to the free market theory. The paper continues! with two all important(predicate) events in the history of the ball-shaped crude oil market and the part OPEC played in this events. Thus the paper investigates the oil crisis of 1973 and, second, the increase in price in the 2000s which peaked in 2008. II.The undesirability of a cartel The main decide of forming a cartel is to increase market power by pushing prices higher than they would be under market conditions...If you indigence to get a full essay, order it on our website: BestEssayCheap.com

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