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 Originally Posted by wufwugy
If OPEC is an oligopoly
Funny you mention that word.
Oligopolistic competition can give rise to a wide range of different outcomes. In some situations, the firms may employ restrictive trade practices (collusion, market sharing etc.) to raise prices and restrict production in much the same way as a monopoly. Where there is a formal agreement for such collusion, this is known as a cartel. A primary example of such a cartel is OPEC which has a profound influence on the international price of oil.
Cartels usually occur in anoligopolistic industry, where the number of sellers is small (usually because barriers to entry, most notably startup costs, are high) and the products being traded are usually homogeneous.
I also never said that they completely control the market, only that they have significant influence. Regardless, oil is a barely free market.
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