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Brazilian government Organization of the Petroleum Exporting Countries (OPEC) private oil industry Petrobas company 

          Brazilian government
Organization of the Petroleum Exporting Countries (OPEC)
private oil industry
Petrobas company
Brazilian government Organization of the Petroleum Exporting Countries (OPEC) private oil industry Petrobas company

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Principles of Economics
Principles of Economics
Gregory Mankiw 8th Edition
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Brazilian government Organization of the Petroleum Exporting Countries (OPEC) private oil industry Petrobras company Brazilian government Organization of the Petroleum Exporting Countries (OPEC) private oil industry Petrobras company
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Over the last 40 years the Organization of Petroleum Exporting Countries (OPEC) has had varied success in forming and maintaining its cartel agreements. Explain how the following factors may contribute to the difficulty of forming and/or maintaining its price and output agreements. a. New oil fields are discovered and increased drilling is undertaken in the Gulf of Mexico and the North Sea by nonmembers of OPEC. b. Crude oil is a product that is differentiated by sulfur content: it costs less to refine low-sulfur crude oil into gasoline. Different OPEC countries possess oil reserves of different sulfur content. c. Cars powered by hydrogen are developed.

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The Organization of the Petroleum Exporting Countries (OPEC) is a cartel of 12 countries that controls roughly two-thirds of the world's oil production. The cartel gives countries quotas for production. Which of the following statements correctly describe a cartel such as OPEC? (can be more than one answer) - Each country has a dominant strategy to keep their quota regardless of what the other members do. - The cartel benefits if everyone keeps their quota. - If one member cheats on the agreement, the others are also likely to increase their production. - The cartel benefits if everyone cheats and produces more. - If one member cheats on the agreement, the others are still likely to keep their assigned quotas. - Each country has a dominant strategy to overproduce to increase profits.

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The Organization of the Petroleum Exporting Countries (OPEC) is a cartel of 12 countries that controls roughly two-thirds of the world's oil production. The cartel gives countries quotas for production. Which of the following statements correctly describe a cartel such as OPEC? (can be more than one answer) - Each country has a dominant strategy to keep their quota regardless of what the other members do. - The cartel benefits if everyone keeps their quota. - If one member cheats on the agreement, the others are also likely to increase their production. - The cartel benefits if everyone cheats and produces more. - If one member cheats on the agreement, the others are still likely to keep their assigned quotas. - Each country has a dominant strategy to overproduce to increase profits.

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Transcript

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00:01 Over the last four years, opec has had various success in maintaining its cartel agreements.
00:08 And we're supposed to determine how the following three situations would affect their ability to maintain their cartel agreements.
00:20 First, if new oil fields are discovered in the gulf of mexico and the north sea by non -members of opec, well, this would increase competition.
00:30 And decrease prices, which would make the agreement harder to maintain.
00:43 The second is the fact that crude oil is different, according to its sulfur content, it's cheaper to refine low sulfur crude oil and gasoline, and different opec countries have different amounts of sulfur in their crude oil...
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