Developing Countries Have Often Attempted to Establish Cartels So as to Counter

question 14

Essay

Developing countries have often attempted to establish cartels so as to counter the actual or perceived inexorable downward push on the prices of their exported commodities. OPEC is the most well known of these. How are such cartels expected to help the developing countries?
At times importing countries profess support for such schemes. Can you think of any logical basis for such support?
How are cartels like monopolies, and how are they different from monopolies. Why is there a presupposition among economists that such schemes are not likely to succeed in the long run?

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Definitions:

Labor Rate Variance

The difference between the actual cost of labor and the expected (or standard) cost, often used in manufacturing to measure efficiency and cost management.

Favorable

A term typically used in budgeting and accounting to describe variances or outcomes that are better than expected or budgeted figures.

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the standard variable overhead estimated.

Variable Overhead Efficiency Variance

The difference between the actual hours taken to produce a good and the standard hours expected, multiplied by the variable overhead rate.