oligopoly in real world
DESCRIPTION
This Slides provides insight into how OPEC raised its price using collusive oligopoly strategy but could not keep too long!TRANSCRIPT
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Himalaya Ban
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“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.
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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
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OPEC AND THE WORLD OIL MARKET
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What did OPEC do?
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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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