Oligopoly in real world
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This Slides provides insight into how OPEC raised its price using collusive oligopoly strategy but could not keep too long!
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Oligopoly in real world
- 2. “People of the same trade seldom meet together , but the conversation ends in a conspiracy against the public, or in some diversion to raise prices .” Adam Smith from The wealth of Nations.
- 3. OPEC ( Organization of Petroleum Exporting Countries) • Established in 1960 • Consists of 13 oil exporting nations • Controls 75% of the oil reserves • Goal is to maintain high oil price
- 4. OPEC AND THE WORLD OIL MARKET
- 5. What did OPEC do?
- 6. Conclusion • Oligopoly firms maximize their total profit by forming a cartel and acting like monopolist • Self interest drives from cooperation even when it is in their mutual interest