2B. PICK BEST ANSWER Many of the world's major oil producers agreed on Saturday to extend the record oil production cuts that have helped bolster oil prices since their collapse in April in the depths of the coronavirus pandemic. Oil ministers from the Organization of the Petroleum Exporting Countries, as well as other producers led by Russia, met by video conference on Saturday and reached an agreement to continue cutting 9.7 million barrels a day – or about 10 percent of global output in normal times – through July, OPEC said in a news release. Which of the following is an unlikely outcome if the agreement works? Higher oil prices will stimulate investment in alternative energy When OPEC and Russia collaborate they have some market power and are not simply price takers. However, setting prices is more difficult for oligopolies than monopolies. OPEC's marginal costs of production will equal the market price Given the inelastic demand for oil, higher prices will lead to a small decrease in demand Revenue will increase as output falls 2C. PICK BEST ANSWER Saudi Arabia's economy is able to extract oil at a lower cost than any other country. Based only on the information provided here, Saudi Arabia must have _in oil production. A comparative advantage Perfect competition A monopoly An absolute advantage A relative advantage
2B. PICK BEST ANSWER Many of the world's major oil producers agreed on Saturday to extend the record oil production cuts that have helped bolster oil prices since their collapse in April in the depths of the coronavirus pandemic. Oil ministers from the Organization of the Petroleum Exporting Countries, as well as other producers led by Russia, met by video conference on Saturday and reached an agreement to continue cutting 9.7 million barrels a day – or about 10 percent of global output in normal times – through July, OPEC said in a news release. Which of the following is an unlikely outcome if the agreement works? Higher oil prices will stimulate investment in alternative energy When OPEC and Russia collaborate they have some market power and are not simply price takers. However, setting prices is more difficult for oligopolies than monopolies. OPEC's marginal costs of production will equal the market price Given the inelastic demand for oil, higher prices will lead to a small decrease in demand Revenue will increase as output falls 2C. PICK BEST ANSWER Saudi Arabia's economy is able to extract oil at a lower cost than any other country. Based only on the information provided here, Saudi Arabia must have _in oil production. A comparative advantage Perfect competition A monopoly An absolute advantage A relative advantage
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter3: Demand Analysis
Section: Chapter Questions
Problem 11E: Federal excise taxes on gasoline vary widely across the developed world. The United States has the...
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