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Principles of Economics 2e

2nd Edition
Steven A. Greenlaw; David Shapiro
ISBN: 9781947172364

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BuyFindarrow_forward

Principles of Economics 2e

2nd Edition
Steven A. Greenlaw; David Shapiro
ISBN: 9781947172364
Textbook Problem

When OPEC raised the price of oil dramatically in the mid-1970s, experts said it was unlikely that the cartel could stay together over the long term-that the incentives for individual members. to cheat would become too strong. More than fort),r years later, OPEC still exists. Why do you think OPEC has been able to beat the odds and continue to collude? Hint: You may wish to consider non-economic reasons.

To determine

Reasons why OPEC has been able to beat the odds and continue to collude.

Explanation

OPEC is association of OIL and PETROLIUM EXPORT COUNTRIES. They continued to be a part of cartel for the following reasons:

  1. To protect the interest of consumers.
  2. By preventing the price and output fluctuations, it stabilized the world oil prices...

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