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Essay

Oligopoly

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Issue:

Business

 

Written by:

Philip C

 

Date added:

November 5, 2014

 

Level:

University

 

Grade:

A

 

No of pages / words:

4 / 872

 

Was viewed:

547 times

 

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Essay content:

If OPEC and other oil exporters did not compete, they could ensure much higher prices for prices for everyone. Output quotas of its members produced staggering price increases (from $1.10 to $11.50 per barrel in the early 1970's, and up to $34.00 in the late 1970's: an increase of 3400% in ten years)...
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The low price elasticity of oil demand implies that moderate output restrictions increases price in short run - a favorable environment for a cartel. In 1973 OPEC output contributed two-thirds of the total world oil production. 2. In 1975 OPEC countries had a substantial market power of 70 %. 3. The effectiveness of OPEC is further enhanced since just four countries (Saudi, Arabia, Kuwait, Iran and Venezuela) regulate 75% of OPEC’s oil reserves,...
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