OLIGOPOLY Oligopoly is a market with a few sellers. Fewness means in this market number of firms is such that one firm’s action affects the other firms in the market. Hence whenever any firm makes any decision regarding price etc‚ it has to take into account the behavioural response of the other. This main feature of oligopoly is called interdependence. This interdependence brings forth the need for strategic decision making. Strategic decision making involves conjectural variation. Conjectural
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energy The reality is‚ that the world oil demand is forecasted to grow in 2009. “World oil demand is forecast to grow by 0.9 Millions of Barrels per Day (mb/d) in 2009‚ averaging 87.71 mb/d which is 0.1 mb/d lower than in the current year.” (OPEC‚ Monthly oil market report‚ July 2008 p. 3). This report indicates that we expect a slow down in the years after 2009. Assumptions for this oil demand forecasts are; the Worlds Gross Domestic Product (GDP) grow will slow down compared to 2008‚ we expect
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Oil Price Analysis: The Impact Of Supply & Demand By Greg McFarlane It’s easy to curse and moan when gas seems expensive. The oil companies are abusing the helpless customers who are effectively indentured to them‚ and can name their own prices thanks to a system of collusion and profiteering. Something‚ probably involving legislation‚ ought to be done. Except the truth lies elsewhere. In the long run‚ oil is about as purely elastic a commodity as there is‚ every movement on the production and consumption
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which can be found in the Appendix ("OPEC: Frequently Asked Questions" 5 Oct 2003). OPEC reported in 2001 crude oil reserves stood at 1‚074‚850 million barrels of which 79% were in OPEC countries. They also reported that the world oil demand in 2000 was at about 76 million barrels per day. Oil is a limited resource and may one day run out. According to OPEC‚ there is enough oil in the member country ’s reserves to last another 80 years‚ while non-OPEC country ’s reserves might last only 20
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“Oligopolistic interdependence creates uncertainty‚ which in turn may promote collusive action” Oligopoly is a specific type of market within business. The markets within an oligopoly are controlled by a small number of large and powerful companies; contrast to a monopoly (where the market is controlled by a single company‚ allowing it full control of the market and its respective conditions – e.g. price & availability) and perfect competition (where numerous businesses of parallel aptitude
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(i) Collusion is common among oligopoly firms. Discuss the factors that make collusion likely to succeed. Use the relevant industry to support your answer. Oligopolistic firms are known to be independent as there are only a few sellers dominating the market; therefore changes in the price‚ sales or output of a firm will surely affect their competitors. The telecommunication industry in Malaysia exhibits the oligopoly market. For instance‚ Maxis or Digi customers are more likely to subscribe to Celcom
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recovery. Between 1997 & 1998‚ the crude price spiralled downward in response to economic crisis in Asia and increased oil production‚ OPEC failed to pre-empt such adverse impact. Prices began to recover in early 1999 to above $25 per barrel. Crude oil prices plummeted in the wake of September 11‚ 2001 terrorist attacks. Quota reduction by combined OPEC/Non OPEC produced desired effect with oil prices moving into the $25 range by March 2002. In 2003‚ The loss of production capacity during
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significantly market share. OPEC is considered a Monopolistic-Cartel type of organization. Firm’s demand curve This type of structure has the advantage that while increasing oil prices may shift the demand curve. The model allows backstop technology and tariffs on oil imports; therefore‚ the imposition of tariffs to importing countries will reduce OPEC prices without affecting domestic prices. OPEC For years the Organization of Petroleum Exporting Countries (OPEC) can be use as an example of
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Exporting Countries (OPEC) slowed down oil production‚ and placed an embargo on the United States and the Netherlands. Before the crisis‚ OPEC was offering oil to the world at a decent price‚ however the end of the Arab-Israeli war changed that. After the war OPEC raised prices for Europeans‚ and even placed an embargo on oil being sent to the Netherlands and the United States. This embargo forced Americans to purchase European cars‚ which helped the economy of Europe. Eventually OPEC was forced to lower
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over an inverted letter | | | wrong font | | Definition of ’Organization Of Petroleum Exporting Countries - OPEC’ An organization consisting of the world’s major oil-exporting nations. The Organization of Petroleum Exporting Countries (OPEC) was founded in 1960 to coordinate the petroleum policies of its members‚ and to provide member states with technical and economic aid. OPEC is a cartel that aims to manage the supply of oil in an effort to set the price of oil on the world market‚ in order
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