oligopoly in real world
Post on 05-Dec-2014
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This Slides provides insight into how OPEC raised its price using collusive oligopoly strategy but could not keep too long!
TRANSCRIPT
Himalaya Ban
“People of the same trade seldom meet together , but the conversation ends in a conspiracy against the public, or in some diversion to raise prices .”
Adam Smith from The wealth of Nations.
OPEC( Organization of Petroleum Exporting Countries)
• Established in 1960• Consists of 13 oil exporting nations• Controls 75% of the oil reserves• Goal is to maintain high oil price
OPEC AND THE WORLD OIL MARKET
What did OPEC do?
Conclusion
• Oligopoly firms maximize their total profit by forming a cartel and acting like monopolist
• Self interest drives from cooperation even when it is in their mutual interest
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