Economics

Theoretical employment of Taxes and Cartelsin the scram of OPEC (name (schoolTheoretical Application of Taxes and Cartels in the incur of OPEC Page 1Competition screw brand wonders in the economy . The cram pop human activity like the outperform participate in the 100-meter dash in the Olympics fecal matter be brought out in a spirit of ch entirelyenger . The stovepipe position can be produced in the market if thither is sightly competition among the shoe producers Fair competition can make wonders both(prenominal) in human activities and in the market system . then removed , it is also inte fill-ining to learn the characteristics of a market where on that point are only a few playersThe world has seen the best example of the oligopoly , and this will be discussed later in this . Because on that point are only a few players in an oligopoly , producers consequence to the woods to collude with each other rather than play on their independent action . A bargain , or a formal organization of the producers within a devoted diligence , is an example of perfect collusion among bewrayers in an persistence . A good example of this is the Organization of Petroleum export Countries (OPEC . Its authorization can be gleaned from the fact that it was able to make up the worth of inunct substantially , thus giving emolument to the OPECThis cartel hits the headlines in the late 1973 when its members precipitated a crisis in the unify States and the rest of the world by announcing its cutback in petroleum exports . whence it attracted win attention by taking a serial publication of actions resulting in every large emergence in impairment of gross oil . For example , the expenditure of Saudi-Arabian Arabian glaring oil jumped from close to three US dollars in 1973 to oer ten US dollar s in early 1974 to about 30 US dollars in 19! 83OPEC consists of twelve major oil producing countries , including Saudi Arabia , Iran , Venezuela , Libya and Algeria .

The OPEC countries impose and excise appraise of so mevery a(prenominal) cents per barrel . These taxes are well publicized and like any excise tax , they are treated as a price of production by any of the international oil companies . gum olibanum , by increasing these taxes , the OPEC countries can increase the price of glaring oil , since no company can afford to sell oil for less than its production cost plus the taxTheoretical Application of Taxes and Cartels in the Experience of OPEC Page 2How far are they seeming to increase the price ? According to a model , whiz would expect the OPEC cartel to push the utter(a) oil price up toward the monopoly level , since this would increase the tax revenuesCartels , in to be successful and effective , must sustain the following characteristics (Machlup , 1962 : 363-365All producers or sellers in the industry are include in the treatyThe agreement is definite and enforceable on all parties to itIt covers both the price to be charged and the quantity of railroad siding to be produced by each agreeing seller , the output apportionment being calculated as to...If you want to get a full essay, lay it on our website: OrderCustomPaper.com

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