What are the challenges for the oil market as follows:Competition in the market including the supply of shale oil, Technological challenges, and Dealing with fluctuations in the international oil prices

Answered: What are the challenges for the oil…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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What are the challenges for the oil market as follows:
- Competition in the market including the supply of shale oil,
- Technological challenges, and
- Dealing with fluctuations in the international oil prices

Expert Solution

Step 1

There exists various markets like perfectly competitive market, oligopoly market, monopoly, monopolistic competition, etc. The oil market is basically oligopoly as there are only few sellers and there exists a number of buyers. Hence, they forms cartels in order to get rid of the price wars.

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