Answer the following questions. Provide specific examples to support your answers.
1. How many countries are in this cartel? Do you think the attributes of OPEC qualify it as an oligopolistic market structure? Why or why not?
2. Using backgrounds such as a Nash equilibrium and the Prisoner Dilemma, how would you explain OPEC countries that frequently cheat on OPEC agreements to reduce oil production to keep oil prices high, and then the cheater increases production (at a lower price) to gain more of the profits?
3. Do you believe that oil prices today are being driven more by forces of market supply and demand, or by OPEC agreements?
4. What measure do you think OPEC could take to ensure member adherence to OPEC member-country agreements? Is it legal in the USA to form a cartel like this? Why or why not?
5. If member countries have the capacity to stray from agreements, do you believe this is an oligopoly, as contrasted to all member countries adhering to the agreements? Why or why not?
6. If all members always adhere to the OPEC agreements, is this a monopoly, or is it still considered an oligopoly? Why?
7. Do you think expanding oil production in the USA, to include possible increases in the supply from the pipeline coming from Canada, bears on the answer as to whether OPEC is a monopoly or an oligopoly?
Answer the following questions. Provide specific examples to support your answers.
1. How many countries are in this cartel? Do you think the attributes of OPEC qualify it as an oligopolistic market structure? Why or why not?
2. Using backgrounds such as a Nash equilibrium and the Prisoner Dilemma, how would you explain OPEC countries that frequently cheat on OPEC agreements to reduce oil production to keep oil prices high, and then the cheater increases production (at a lower price) to gain more of the profits?
3. Do you believe that oil prices today are being driven more by forces of market supply and demand, or by OPEC agreements?
4. What measure do you think OPEC could take to ensure member adherence to OPEC member-country agreements? Is it legal in the USA to form a cartel like this? Why or why not?
5. If member countries have the capacity to stray from agreements, do you believe this is an oligopoly, as contrasted to all member countries adhering to the agreements? Why or why not?
6. If all members always adhere to the OPEC agreements, is this a monopoly, or is it still considered an oligopoly? Why?
7. Do you think expanding oil production in the USA, to include possible increases in the supply from the pipeline coming from Canada, bears on the answer as to whether OPEC is a monopoly or an oligopoly?
