Principles of Economics 2e
Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
Textbook Question
Book Icon
Chapter 10, Problem 17CTQ

Would you expect the kinked demand curve to be more extreme (like a right angle) or less extreme (like a normal demand curve) if each film in the cartel produces a near-identical product Like OPEC and petroleum? What if each film produces a somewhat different product? Explain your reasoning.

Blurred answer
Students have asked these similar questions
Why has the OPEC oil cartel succeeded in raising prices substantially while the CIPEC copper cartel has not? What conditions are necessary for successful cartelization?
The diagram below illustrates the change in market equilibrium in the global oil market due to a demand shock, with the demand curve shifting from Demand to Demand'. Supply of oil is provided by OPEC countries, as part of a cartel agreement, and other countries outside the cartel, P. P. Demand Demand Quantity, Q Q Q. Which of the following statements is/are correct? global a) If more countries joined OPEC, and reduced the quantity of oil that they produced as a cartel, it is possible that market oil price could stay the same depending on other market dynamics. b) The price of oil in the global market is fixed by the members of the OPEC cartel. c) If there is increased production of oil in a non-OPEC country when demand is at Demand' there would be a reduction in price from P1, ceteris paribus.
A film called The 33 tells the story of 33 coal miners in Chile who were trapped inside a collapsed coal mine for more than two months. While trapped inside the mine, the miners agreed that if they ever got out alive, they would sell their story as a group, and that none of them would tell their stories individually. In essence, they formed a cartel, agreeing to sell just one big story for a lot of money rather than each miner selling his own individual story. As it turned out, they did get out alive and they did stick to their agreement. None of the miners sold his story individually. That is, the “cartel” formed by these trapped coal miners worked; nobody cheated. Explain why this cartel, unlike almost all others, was successful. This is not a research question; you don’t have to have the factually correct answer to earn full credit on this question. Rather, a full-credit answer will explain the conditions under which a cartel will be successful and then indicate the specifics of…
Knowledge Booster
Background pattern image
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning
Text book image
Microeconomics
Economics
ISBN:9781337617406
Author:Roger A. Arnold
Publisher:Cengage Learning
Text book image
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc
Text book image
Micro Economics For Today
Economics
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Cengage,
Text book image
Survey Of Economics
Economics
ISBN:9781337111522
Author:Tucker, Irvin B.
Publisher:Cengage,
Text book image
Microeconomics A Contemporary Intro
Economics
ISBN:9781285635101
Author:MCEACHERN
Publisher:Cengage