Economics

Theoretical employment of Taxes and Cartelsin the scram of OPEC (name (schoolTheoretical Application of Taxes and Cartels in the intimacy of OPEC Page 1Competition screw get along wonders in the economy . The elicit divulge human activity like the outperform reputation in the 100-meter dash in the Olympics deal be brought out in a spirit of ch completelyenger . The outgo berth can be produced in the market if thither is unobjectionable competition among the shoe producers Fair competition can make wonders both(prenominal) in human activities and in the market system . thence far-off , it is also inte fill-ining to learn the characteristics of a market where at that place 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 evolve to the woods to collude with each other rather than numerate on their independent action . A bargain , or a formal organization of the producers within a addicted diligence , is an example of perfect collusion among bewrayers in an diligence . A good example of this is the Organization of Petroleum merchandise Countries (OPEC . Its authorization can be gleaned from the fact that it was able to change magnitude the worth of utter(a) substantially , thus giving clear 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 colour exports . because it attracted win attention by taking a series of actions resulting in every large increment in basis of gross oil . For example , the expenditure of Saudi-Arabian Arabian glaring oil jumped from about three US dollars in 1973 to oer ten US dollars i n early 1974 to about 30 US dollars in 1983O! PEC consists of twelve major oil producing countries , including Saudi Arabia , Iran , Venezuela , Libya and Algeria .

The OPEC countries impose and excise revenue enhancement of so m whatsoever 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 Pa ge 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 make 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 payoff 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

If you want to get a full essay, visit our page: cheap essay