• Research Paper on:
    Background and the Pricing Strategies of OPEC

    Number of Pages: 6

     

    Summary of the research paper:

    In six pages this paper examines the time period from 1973 until 2002 in terms the pricing strategies and power wielded by OPEC with its background also considered. Three sources are listed in the bibliography.

    Name of Research Paper File: TS14_TEopecrc.rtf

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    Unformatted Sample Text from the Research Paper:
    this reason that one of the few legal cartels exist and is accepted to ensure the oil flows and needs are met. If we look to the topic of  oil and the role of economics in its use and development we need to understand the role that OPEC has, and continues to play.  The role of economics in the oil industry can be seen as the same as any other market; one of supply and demand. The rules of supply  and demand are such that where the demand of a product outstrips supply there will be in increase in price until the demand has dropped enough for equilibrium in the  market to be reached. If the supply exceeds the demand then the price will fall until a level is reached where the demand has increased sufficiently for the market to  again be in equilibrium. In reality most markets are in a state of flux, however, with oil products the market is a needed for the product, and even where prices  increase the overall income that is received by the producers will increase as the decrease will not be in proportionate to the price increase.  This means that it is an inelastic product, as petroleum is an inelastic product, when prices increase and the demand decreases as a result the oil producers will  still see an overall increase in profits. For this reason it is understandable why the producers would wish to maintain higher prices by limiting the supply.  The role of creating OPEC can be seen as the cure as well as indicating the way that the oil market worked before its introduction such 

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