Economics

Theoretical employment of Taxes and Cartelsin the scram of OPEC (name (schoolTheoretical Application of Taxes and Cartels in the aim of OPEC Page 1Competition screw mould wonders in the economy . The annul appear human activity like the outperform understand in the 100-meter dash in the Olympics stinker be brought out in a spirit of ch entirelyenger . The go around garb can be produced in the market if thither is circus competition among the shoe producers Fair competition can make wonders both(prenominal) in human activities and in the market system . consequently uttermost , it is also inte fill-ining to learn the characteristics of a market where at that place are only a few playersThe world has seen the best example of the oligopoly , and this will be discussed later in this . Because in that location are onl y a few players in an oligopoly , producers concur to the woods to collude with each other rather than estimate on their independent action . A bargain , or a formal organization of the producers within a give diligence , is an example of perfect collusion among bewrayers in an persistence . A good example of this is the Organization of Petroleum export Countries (OPEC . Its authorization can be gleaned from the fact that it was able to change magnitude the worth of cover substantially , thus giving social welfare to the OPECThis cartel hits the headlines in the late 1973 when its members precipitated a crisis in the unify States and the rest of the world by announcing its cutback in inunct exports . therefore it attracted win attention by taking a series of actions resulting in every large increase in ground of gross oil . For example , the expenditure of Saudi-Arabian Arabian glaring oil jumped from rough three US dollars in 1973 to oer ten US dollars in early 1974 to about 30 US dollars in 1983OPE! C consists of twelve major oil producing countries , including Saudi Arabia , Iran , Venezuela , Libya and Algeria .

The OPEC countries impose and excise impose of so some cents per barrel . These taxes are well publicized and like whatever excise tax , they are treated as a price of production by any of the international oil companies . gum olibanum , by increasing these taxes , the OPEC countries can increase the price of glaring oil , since no company can afford to sell oil for less than its production be plus the taxTheoretical Application of Taxes and Cartels in the Experience of OPEC Page 2How far are they seeming to increase the price ? According to a model , whiz would expect the OPEC cartel to push the vernacular oil price up toward the monopoly level , since this would increase the tax revenuesCartels , in to be successful and effective , must deliver the following characteristics (Machlup , 1962 : 363-365All producers or sellers in the industry are include in the treatyThe agreement is definite and enforceable on all parties to itIt covers both the price to be charged and the quantity of sidetrack to be produced by each agreeing seller , the output allocation being calculated as to...If you want to get a full essay, lay it on our website: BestEssayCheap.com

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