Running head: OPEC1Econ Assignment 4Institution AffiliationNameDateRunning head: OPECThe reason why OPEC did not achieve world prominence until the 1970s? What factorscontributed to OPECs problems in the 1980s?Answer:The Organization of Petroleum Exporting Countries (OPEC) is a group of countries that sel oilon the international market. OPEC was poorly performing during 1960s since it membercountries were operating as individual competitive sellers and each country was not important inrelation to the overall market. However, the member countries went into an agreement to restrictcompetition among themselves through production quota and hence OPEC was able regainmarket control and stabilized the petroleum price. OPEC did not achieve worldwide prominenceuntil the revolution in Iran that caused an increased demand for oil to become inelastic andstrong (Hancock, 2014). This helped OPEC to take advantage of the demand inelastic byintentionally limiting the petroleum supply in the international market and hence increased price.During the 1970s, OPEC succeeded in increasing its members revenue. Estimates during the1970s helped to put non-OPEC elastic between ...
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