Economic Structure of Opec - 968 Words

The Economic Structure of OPEC For: Professor John Zink BUS 610-0703B Economics for the Global Manager By: Maria A. Journiette August 31, 2007 Many companies operate under a monopoly which gives them an edge or a corner on the market. In this discussion we will focus on the differences between a monopoly, oligopoly, and a cartel. We will also look at what game theory is and its affect on monopolies and cartels and the welfare affect of each of the above mentioned. A monopoly is defined as, sole control of a particular line of goods or services in a given market or the means to control distribution and price.(Webster s, 2000) In a monopoly situation there is only one person with a particular good or service and because†¦show more content†¦Looking at these figures we can see that with the demand the prices continued to rise. Also the war in Iraq contributed to the increase prices. If we were to look at the price of a barrel of crude oil today it would top all of these prior years at $71.17 a barrel.(tonto.eia.doe.gov, 2007) The problem is that the prices continue to rise while the income and wages of the American w orker s remains the same. With the continued increase in the demand for oil, the financial future for OPEC looks very secure. So, what about the members, certain countries production will have to decrease while other foreign countries may have to increase their production. OPEC should continue to strive to look for ways to be environmentally friendly and ways to keep up with the demand without increasing the cost to the consumers. If things remain the same the price of crude oil will continue to rise to the point that the supply may be more than the demand as we continue to look for alternatives to crude oil. References Radcliffe, J. (2000). The New International Webster s Pocket Business Dictionary of the English Language. Trident Press International; United States of America. m-w.com Retrieved August 28, 2007 from, http://www.m-w.com Energy Information Administration. This Week In Petroleum. Retrieved August 29, 2007 from,Show MoreRelatedEssay on Understanding OPEC: An Economic Analysis1353 Words   |  6 PagesUnderstanding OPEC: An Economic Analysis In the last few months, much has been said of Iraq’s invasion of Kuwait in 1990. Interestingly enough, one of Iraq’s motivating factors was economics. Kuwait provided Iraq with a pretext for war as it violated the economic policies of the Organization of Oil-Exporting Countries by exporting oil above its quotas. This is but one chapter in the complicated history of OPEC. OPEC is an international assembly of nations which co-ordinates and unifies the petroleumRead MoreThe Oil Embargo of 1972-19731247 Words   |  5 Pages that the war in Iraq was based upon an attempt of foreign control over the Iraqi petroleum resources. 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