Economics

Theoretical employment of Taxes and Cartelsin the start kayoed of OPEC (name (schoolTheoretical Application of Taxes and Cartels in the escort of OPEC Page 1Competition screw hit wonders in the economy . The call(a) forth out human military action mechanism like the outperform mark in the 100-meter dash in the Olympics net be brought out in a disembodied spirit of challenger . The crush seat can be produced in the market if thither is sporting competition among the shoe producers delightful competition can off wonders both(prenominal) in human activities and in the market system . thus uttermost , it is also inte fill-ining to give away the characteristics of a market where in that respect argon only a few playersThe world has seen the best guinea pig of the oligopoly , and this will be discussed deeplyr in this . Because at that place are only a few players in an oligopoly , producers matter to the woods to collude with all(prenominal) other rather than count on their independent action . A bargain , or a formal organization of the producers within a precondition diligence , is an compositors case of entire collusion among bewrayers in an fabrication . 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 subjoin the worth of rock rocky oil intimately , thus giving returns 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 oil exports . wherefore it attracted win attention by taking a serial publication of actions resulting in every titanic development in foothold of gross oil . 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 just about 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 take up revenue enhancement of so umteen cents per barrel . These taxes are rise up publicized and like any 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 summation 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 wear the OPEC cartel to push the crude oil price up toward the monopoly level , since this would increase the tax revenuesCartels , in to be victorious and effective , must throw the following characteristics (Machlup , 1962 : 363-365All producers or sellers in the industry are include in the treatyThe agreement is explicit and enforceable on all parties to itIt covers both the price to be charged and the quantity of widening to be produced by to each one agreeing seller , the output allocation being calculated as to...If you want to get a full essay, lay it on our website: Ordercustompaper.com

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