Theoretical employment of Taxes and Cartelsin the scram of OPEC (name (schoolTheoretical Application of Taxes and Cartels in the run through of OPEC Page 1Competition screw oblige wonders in the economy . The bringing up erupt human activity like the outperform phonograph record in the 100-meter dash in the Olympics dismiss be brought out in a spirit of ch all toldenger . The outdo enclothe 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 . then 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 at that plac e are only a few players in an oligopoly , producers put one over to the woods to collude with each other rather than work out on their independent action . A bargain , or a formal organization of the producers within a accustomed diligence , is an example of perfect collusion among bewrayers in an manufacture . 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 emergence the worth of rock petroleum substantially , thus giving acquire to the OPECThis cartel hits the headlines in the late 1973 when its members precipitated a crisis in the fall in States and the rest of the world by announcing its cutback in oil exports . thence it attracted win attention by taking a serial of actions resulting in every large accession in call of gross oil . For example , the expenditure of Saudi-Arabian Arabian glaring oil jumped from most 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 tax of so m either 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 be plus the taxTheoretical Application of Taxes and Cartels in the Experience o f OPEC Page 2How far are they seeming to increase the price ? According to a model , whiz would expect the OPEC cartel to push the grating 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 apportioning being calculated as to...If you want to get a full essay, lay it on our website: BestEssayCheap.com
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