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    Oligopoly

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    The opening statement on the Web site of the Organization of Petroleum Exporting Countries (OPEC) says, "... OPEC's eleven members are all developing countries whose economies are heavily reliant on oil export revenues. They therefore seek stable oil prices that are fair and reasonable for both producers and consumers of oil." To achieve this goal, OPEC attempts to coordinate and unify petroleum policies by raising or lowering their collective oil production. However, increased production by Russia, Oman, Mexico, Norway, and other non-OPEC countries has caused the price of crude oil to fall dramatically in recent years. to achieve its goal of stable and fair oil prices, what must OPEC do to maintain the price of oil at its desired level? Do you think this will be easy for OPEC to do? Explain.

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    Solution Preview

    This is not an easy task. Since all countries want to maximize their profit, they will produce more and more oil (especially the non-OPEC countries). This is because the more they can produce, the more revenue they can generate and more profitable the ...

    Solution Summary

    The solution goes into a great amount of detail about the question being asked. The concepts are very well explained and easy to understand. The solution can be followed very easily by anyone who has some understanding of the concepts beforehand. Overall, an excellent response to the question.

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