QUESTION 36In 2018, a few countries want to join together to restrict the oil supply to the world market. Together, these countries' exports of oil account for 80% of the total global trade. What would they be trying to accomplish? They are attempting to form a cartel, increase their joint output, and control a larger percentage of the total global trade. They are attempting to price discriminate between consumers of their exported oil, thereby increasing their share of the global trade and increasing their joint profits. They are attempting to form a cartel, jointly restrict output, and increase the world price of oil. They are attempting to act as a bloc to restrict entry of new producers to the world market, and thereby protect their joint profits.

A cartel is a business entity formed from the collusion of independent market agents with the motive…

Answered: In 2018, a few countries want to join…

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter9: Monopoly

Section: Chapter Questions

Problem 28CTQ: Intellectual property laws are intended to promote innovation, but some economists, such as Milton...

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QUESTION 36

In 2018, a few countries want to join together to restrict the oil supply to the world market. Together, these countries' exports of oil account for 80% of the total global trade. What would they be trying to accomplish?

		They are attempting to form a cartel, increase their joint output, and control a larger percentage of the total global trade.
		They are attempting to price discriminate between consumers of their exported oil, thereby increasing their share of the global trade and increasing their joint profits.
		They are attempting to form a cartel, jointly restrict output, and increase the world price of oil.
		They are attempting to act as a bloc to restrict entry of new producers to the world market, and thereby protect their joint profits.

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