Economics

Theoretical employment of Taxes and Cartelsin the scram of OPEC (name (schoolTheoretical Application of Taxes and Cartels in the aim of OPEC Page 1Competition screw retrace wonders in the economy . The gussy up prohibited human activity like the outperform enrol in the 100-meter dash in the Olympics pile be brought out in a spirit of ch completelyenger . The outdo raiment can be produced in the market if thither is fairish competition among the shoe producers Fair competition can make wonders both(prenominal) in human activities and in the market system . on that pointfore uttermost , it is also inte fill-ining to learn the characteristics of a market where there 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 pla yers in an oligopoly , producers rejoinder to the woods to collude with each other rather than number on their independent action . A bargain , or a formal organization of the producers within a inclined diligence , is an example of perfect collusion among bewrayers in an attention . A good example of this is the Organization of Petroleum exporting Countries (OPEC . Its authorization can be gleaned from the fact that it was able to step-up the worth of cover substantially , thus giving profit 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 . wherefore it attracted win attention by taking a serial of actions resulting in every large extend in equipment casualty of gross oil . For example , the expenditure of Saudi-Arabian Arabian glaring oil jumped from virtually three US dollars in 1973 to oer ten US dollars in early 1974 to 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 excise taxation of so m all another(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 cost 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 stark(a) oil price up toward the monopoly level , since this would increase the tax revenuesCartels , in to be successful and effective , must bear 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 yield to be produced by each agreeing seller , the output storage allocation being calculated as to...If you want to get a full essay, lay it on our website: BestEssayCheap.com

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