What are international cartels and who benefits and who is harmed by them? Should they be allowed to exist?© BrainMass Inc. brainmass.com October 17, 2018, 10:00 am ad1c9bdddf
Business Dictionary (2012) defined international cartels as "a formal agreement between two or more companies or countries that agree on certain ideas and operate internationally. The cartel will typically agree to coordinate pricing and marketing standards with the intention of gaining a monopoly status".
A cartel is a group of two or more independent sellers who agree to fix or control prices or output in a given market... international cartels are those that have participants from two or more countries (Connor, 2004).
Cartels themselves benefit from their practices to the detriment of legally existing competitors.
Adam Smith labeled them as "conspiracies against the public" (Fear, 2006).
Producers form a cartel with the goal of limiting competition. By restricting output and increasing price, ideally to the price ...
The solution identifies the harm that international cartel inflect on the economy. The presence of international cartels distorts the natural functioning of the market. It is suggested that be controlled the soonest possible time as trade and commerce are adversely affected.
Monopolies & oligopolies
You have been contracted by an economic consulting firm to determine the economic structure and possible future actions of OPEC, the Organization of Petroleum Exporting Countries.
1. Explain the difference between a monopoly and an oligopoly, and a cartel.
2. Provide an example of a monopoly, an oligopoly, and a cartel.
3. Discuss the welfare effects of monopolies and oligopolies.
4. Explain the game theory.
5. Using your own words, discuss the economic purpose of OPEC.
6. What has happened to oil prices over the past five years?
7. Based on your answers to the above questions, synthesize the information you have gathered and tell the economic consulting firm which actions you think OPEC will take over the next year.View Full Posting Details