Question

Please explain how you arrived at the answer. The combination of my professor lacking the ability to teach us, coupled with my innate inability to understand economics well, makes for a nightmarish class. YOU WILL NOT RECEIVE POINTS IF YOU DO NOT SHOW WORK/EXPLAIN. Thank you! OPEC announced recently that its member countries - a group of 13 oil-producing nations - will cut oil production in an attempt to raise prices. Will it work? In traditional economic theory, such production-fixing is hard to enforce because individual members of a cartel have an incentive to ignore their agreed-upon quotas. After all, if a member of the cartel produces more than it has agreed to produce, but everybody else sticks to the game plan, it can enjoy the benefits of rising prices and receive higher revenue. Assume global demand for oil is given by O = 34 - P (in billions of barrels) and variable cost conditions to both supply groupings are: VC = 10Qi Fill in the missing entries in both (i) the table and (ii) the payoff matrix below, and determine whether an equilibrium exists in the payoff matrix. P QOPEC ROPEC TTOPEC QNon-OPEC RNon-OPEC TtNon-OPEC TTotal 16 12 6 19 9 6 17.5 9 7.5 "Profits" Payoff Matrix Non-OPEC QNon-OPEC = 6 b. QNon-OPEC = 7.5 b. QOPEC = 12 b. OPEC QOPEC = 9 b.

          Please explain how you arrived at the answer. The combination of my professor lacking the ability to teach us, coupled with my innate inability to understand economics well, makes for a nightmarish class.

YOU WILL NOT RECEIVE POINTS IF YOU DO NOT SHOW WORK/EXPLAIN.

Thank you!

OPEC announced recently that its member countries - a group of 13 oil-producing nations - will cut oil production in an attempt to raise prices. Will it work?

In traditional economic theory, such production-fixing is hard to enforce because individual members of a cartel have an incentive to ignore their agreed-upon quotas. After all, if a member of the cartel produces more than it has agreed to produce, but everybody else sticks to the game plan, it can enjoy the benefits of rising prices and receive higher revenue.

Assume global demand for oil is given by O = 34 - P (in billions of barrels) and variable cost conditions to both supply groupings are: VC = 10Qi

Fill in the missing entries in both (i) the table and (ii) the payoff matrix below, and determine whether an equilibrium exists in the payoff matrix.

P
QOPEC ROPEC TTOPEC QNon-OPEC RNon-OPEC TtNon-OPEC TTotal
16
12
6
19
9
6
17.5
9
7.5

"Profits" Payoff Matrix
Non-OPEC
QNon-OPEC = 6 b.
QNon-OPEC = 7.5 b.
QOPEC = 12 b.
OPEC
QOPEC = 9 b.

please explain how you arrived at the answer the combination of my professor lacking the ability to teach us coupled with my innate inability to understand economics well makes for a nightma 81925

Added by Crystal G.

Question

Please give Ace some feedback