When OPEC Reduces Output to Keep Prices High, OPEC Is

question 74

Multiple Choice

When OPEC reduces output to keep prices high, OPEC is acting as a:

• A) cartel.
• B) price taker.
• C) producer in a contestable market.
• D) producer moving along a supply curve, cutting output as price falls.

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Definitions:

Productive Resource

An economic term for the inputs used in the production of goods or services in the attempt to make an economic profit.

Inelastic

Describing a situation where the demand or supply for a good or service is not highly sensitive to changes in price.

Loan Interest

The additional amount paid by a borrower to a lender in exchange for the use of borrowed money, often expressed as an annual percentage rate.