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Define cartel in the petroleum industry.
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- Define cartel in the petroleum industry in IndiaOPEC is a petroleum cartel, a group of oil producing countries whose objective is to coordinate and unify petroleum policies. What type of market structure is a cartel?Explain the contradictory incentives associated with forming and maintaining cartels.
- Explain why OPEC has been one of the most successful cartels in recent decades. Whatfactors have limited this success?Which of the following would be most likely to contribute to the breakdown of a cartel in a natural resource (e.g., bauxite) market? Group of answer choices high prices low price elasticity of demand high compatibility of member interests unequal member ownership of the natural resourceTrue/False Monopoly market can be created due to the cartel.
- Explain the problem of forming and maintaining the cartel, show graphical analysisBreakdown of a cartel agreement Consider a town in which only two residents, Sean and Yvette, own wells that produce water safe for drinking. Sean and Yvette can pump and sell as much water as they want at no cost. For them, total revenue equals profit. The following table shows the town's demand schedule for water. Price Quantity Demanded Total Revenue (Dollars per gallon) (Gallons of water) (Dollars) 5.40 0 0 4.95 40 $198.00 4.50 80 $360.00 4.05 120 $486.00 3.60 160 $576.00 3.15 200 $630.00 2.70 240 $648.00 2.25 280 $630.00 1.80 320 $576.00 1.35 360 $486.00 0.90 400 $360.00 0.45 440 $198.00 0 480 0 Suppose Sean and Yvette form a cartel and behave as a monopolist. The profit-maximizing price is $ __________ per gallon, and the total output is __________ gallons. As part of their cartel agreement, Sean and Yvette agree to split production equally. Therefore, Sean's profit is $ __________ , and Yvette's profit is __________ .…Differentiate between oligopoly and pure monopoly.
- The table shows the demand schedule for a particular product. Quantity Price 0 100 300 90 600 80 900 70 1200 60 1500 50 1800 40 2100 30 2400 20 2700 10 3000 0 Suppose the market for this product is served by two firms who have formed a cartel and are colluding to set the price and quantity in this market. If the marginal cost to produce this product is constant at $40 per unit, then what price will the cartel set in this market? a. $40 b. $50 c. $60 d. $70 e. $80Q30 The Competition Bureau in Canada wants to increase competition and reduce monopoly power. Thus it it worries about industry concentration in Canada. If Canada's cannabis industry is a cartel, other things constant, a firm in the cannabis cartel will most likely cheat on a price-fixing agreement by: Multiple Choice increasing the price of cannabis and restricting its its output. organizing promotions of cannabis. secretly lowering price of cannabis and increasing sales of cannabis to a few customers. applying the prisoner's dilemma principle. secretly increasing sales of cannabis to a large number of small customers.PRICE (Dollars per can) 2.00 1.80 1.60 Demand 1.40 1.20 1.00 + 0.80 0.60 0.40 0.20 MC=ATC MR 0 15 30 45 60 75 90 105 120 135 150 QUANTITY (Thousands of cans of beer) Monopoly Outcome When they act as a profit-maximizing cartel, each company will produce information, each firm earns a daily profit of $ cans and charge $ so the daily total industry profit in the beer market is $ per can. Given this Oligopolists often behave noncooperatively and act in their own self-interest even though this decreases total profit in the market. Again, assume the two companies form a cartel and decide to work together. Both firms initially agree to produce half the quantity that maximizes total industry profit. Now, suppose that Mays decides to break the collusion and increase its output by 50%, while McCovey continues to produce the amount set under the collusive agreement. Mays's deviation from the collusive agreement causes the price of a can of beer to $ while McCovey's profit is now $ Mays increases…