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Case Study 3 4
Case Study 3 4
BELOY
MSA 202
MANAGERIAL ECONOMICS
1. OPEC currently produces about 38 per cent of the world output of oil.
the effect of the output cut on the current price, stating any
people buy about the same amount whether the price drops or rises.
And oil is one of those things people must have. From 3.5m barrels a
day to cut of 900,000 barrels per day, the current price of the oil may
2. Describe the factors currently driving the world demand for oil; why has
the price not fallen below the $20 level as many expected?
If the price has fallen into $20 per barrel, it means that the
demand for oil for the price had not yet fallen $20 are that first, to be
safe, $20 is the most competitive price the OPEC could offer to have
break-even for the costs they incurred during production. And, Higher
prices will incentivize shale oil and gas production in the US and
decisions.
effort, to set the price of oil on the world market, to avoid fluctuations
production of oil or shale oil will affect the cartel’s output decisions in
the sense that it sets the price of oil on the world market. If they may
References:
https://www.scribd.com/document/16933268/OPEC-Research-
Paper-for-MENA
https://www.thebalance.com/inelastic-demand-definition-
formula-curve-examples-3305935
https://www.thebalance.com/inelastic-demand-definition-
formula-curve-examples-3305935
https://www.investopedia.com/terms/o/opec.asp
https://www.investopedia.com/articles/investing/012216/how-
opec-and-nonopec-production-affects-oil-prices.asp