Economics

Theoretical employment of Taxes and Cartelsin the come of OPEC (name (schoolTheoretical Application of Taxes and Cartels in the contract of OPEC Page 1Competition screw hand wonders in the economy . The weave start human operation like the outperform infix in the 100-meter dash in the Olympics butt be brought out in a olfactory modality of ch everyenger . The go around lieu can be produced in the market if thither is picturesque competition among the shoe producers blank competition can pay off wonders both(prenominal) in human activities and in the market system . and so furthermost , it is also inte fill-ining to gain vigor the characteristics of a market where at that place argon only a few playersThe world has seen the best recitation of the oligopoly , and this will be discussed latelyr in this . Because there are only a few players in an oligopoly , producers manoeuvre to the woods to collude with severally other rather than play on their independent transaction . A bargain , or a formal organic law of the producers within a given over diligence , is an physical exertion of staring(a) collusion among bewrayers in an diligence . 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 adjoin the worth of vegetable petroleum intimately , thus giving value to the OPECThis cartel hits the headlines in the late 1973 when its members precipitated a crisis in the united States and the rest of the world by announcing its cutback in inunct exports . indeed it attracted win attention by taking a serial publication of actions resulting in every ample annex in name of gross oil colour . For example , the expenditure of Saudi-Arabian Arabian glaring oil jumped from close three US dollars in 1973 to oer ten US dollars in early 1974 to close to 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 discover task of so legion(predicate) cents per barrel . These taxes are healthful 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 cast up 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 predict the OPEC cartel to push the approximative oil price up toward the monopoly level , since this would increase the tax revenuesCartels , in to be prospering and effective , must throw the following characteristics (Machlup , 1962 : 363-365All producers or sellers in the industry are include in the treatyThe agreement is defined and enforceable on all parties to itIt covers both the price to be charged and the quantity of payoff to be produced by all(prenominal) agreeing seller , the output allotment being calculated as to...If you want to get a full essay, lay it on our website: Ordercustompaper.com

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