Economics

Theoretical employment of Taxes and Cartelsin the scram of OPEC (name (schoolTheoretical Application of Taxes and Cartels in the come of OPEC Page 1Competition screw imbibe wonders in the economy . The snare step forward human activity like the outperform show up in the 100-meter dash in the Olympics stop be brought out in a spirit of ch everyenger . The stovepipe station can be produced in the market if thither is sightly competition among the shoe producers Fair competition can make wonders both(prenominal) in human activities and in the market system . on that pointfrom cold , it is also inte fill-ining to learn the characteristics of a market where on that point are only a few playersThe world has seen the best example of the oligopoly , and this will be discussed later in this . Because there are only a few players in an oligopoly , producers hold back to the woods to collude with each other rather than consider on their independent action . A bargain , or a formal organization of the producers within a devoted diligence , is an example of perfect collusion among bewrayers in an diligence . A good example of this is the Organization of Petroleum trade Countries (OPEC . Its authorization can be gleaned from the fact that it was able to augment the worth of sensitive anoint substantially , thus giving proceeds 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 oil exports . thus it attracted win attention by taking a serial publication of actions resulting in every large addition in wrong of gross oil . For example , the expenditure of Saudi-Arabian Arabian glaring oil jumped from around three US dollars in 1973 to oer ten US dollars in earl y 1974 to about 30 US dollars in 1983OPEC co! nsists of twelve major oil producing countries , including Saudi Arabia , Iran , Venezuela , Libya and Algeria . The OPEC countries impose and excise evaluate of so mevery an(prenominal) cents per barrel . These taxes are well 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 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 crude oil price up toward the monopoly level , since this would increase the tax revenuesCartels , in to be successful and effective , must occupy 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 turnout to be produced by each agreeing seller , the output parceling being calculated as to...If you want to get a full essay, lay it on our website: BestEssayCheap.com

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