Market structure
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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.
Using the Library, the Internet, and your course materials, find websites that offer this information and answer the following questions (Perloff, 2007).
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.How does game theory explain the interactions of firms within oligopolies and cartels?
5.Using your own words, discuss the economic purpose of OPEC. What has happened to oil prices over the past five years?
6.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.
Reference
Perloff, J. M. (2007). Microeconomics (4th ed.). New York: Pearson Addison Wesley.
Objective:
â?¢Explain the macroeconomic and microeconomic concepts and how they relate to the management of a global organization.
â?¢Critically analyze and evaluate real-life economic problems and opportunities by applying economic concepts, principles, and theory.
â?¢Apply critical thinking skills to analyze business situations
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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.
Using the Library, the Internet, and your course materials, find websites that offer this information and answer the following questions (Perloff, 2007).
1.Explain the difference between a monopoly and an oligopoly, and a cartel.
The difference between monopoly and oligopoly is that in monopoly there is one seller whereas in an oligopoly there are few sellers. In case of an oligopoly it is assumed that each oligopolist is likely to be aware of the actions of the others. The cartel however, is an accord among competing firms usually to control prices, production/output, and marketing. The cartel is different from monopoly or an oligopoly, however, it usually occurs in case of oligopoly so that industry output, market share, and allocation of territories are fixed to improve the profits of the firms and to the detriment of the consumers (2).
2.Provide an example of a monopoly, an oligopoly, and a cartel.
Example of a monopoly is Monsanto, in some cases they hold 100% of the commercial seed market. An example of oligopoly is the wireless provider market. There are four main sellers namely AT&T, Verizon Wireless, T-Mobile, and Sprint that together control 89% of cellular telephone market.
The example of a cartel ...
Education
- BSc , University of Calcutta
- MBA, Eastern Institute for Integrated Learning in Management
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