If OPEC Is an Effective Cartel

question 38

Multiple Choice

If OPEC is an effective cartel,

• A) price changes are dictated by changes in demand.
• B) output changes are dictated by changes in demand.
• C) members agree on output quotas.
• D) all of the above.

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Definitions:

Perfectly Competitive

An economic market scenario where buyers and sellers operate in a setting with full information, resulting in efficient allocation of resources.

Economic Profit

The profit a business makes after deducting both its explicit and implicit costs, not just its operational expenses.

Profit Maximizing

A process by which a firm determines the price and output level that returns the greatest profit.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, or loan payments.