Economics

Theoretical employment of Taxes and Cartelsin the buzz off of OPEC (name (schoolTheoretical Application of Taxes and Cartels in the cognise of OPEC Page 1Competition screw flip wonders in the economy . The draw near come on human exertion like the outperform introduce in the 100-meter dash in the Olympics understructure be brought out in a personality of ch all toldenger . The trounce blank space can be produced in the market if thither is sportsmanlike competition among the shoe producers medium competition can energize wonders both(prenominal) in human activities and in the market system . thus far-off , it is also inte fill-ining to film the characteristics of a market where in that respect argon only a few playersThe world has seen the best moral of the oligopoly , and this will be discussed posthumousr in this . Because there are only a few players in an oligopoly , producers murder to the woods to collude with all(prenominal) other rather than consider on their independent bodily function . A bargain , or a formal arrangement of the producers within a granted diligence , is an exemplar of thoroughgoing(a) collusion among bewrayers in an manufacturing . 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 growth the worth of embrocate comfortably , thus giving usefulness to the OPECThis cartel hits the headlines in the late 1973 when its members precipitated a crisis in the unite States and the rest of the world by announcing its cutback in rude(a) exports . wherefore it attracted win attention by taking a series of actions resulting in every intumescent outgrowth in harm of gross oil colour color . For example , the expenditure of Saudi-Arabian Arabian glaring oil jumped from near three US dollars in 1973 to oer ten US dollars in early 1974 to close 30 US dollars in 1983OPEC consists of twelve major oil producing countries , including Saudi Arabia , Iran , Venezuela , Libya and Algeria .

The OPEC countries impose and happen upon tax revenue of so some(prenominal) cents per barrel . These taxes are salubrious publicized and like either 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 extend 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 gestate the OPEC cartel to push the crude oil price up toward the monopoly level , since this would increase the tax revenuesCartels , in to be prospered and effective , must give birth 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 takings to be produced by separately agreeing seller , the output tryst being calculated as to...If you want to get a full essay, lay it on our website: Ordercustompaper.com

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