Which of the following will weaken OPEC's effect on the world price of oil?
(i) member countries increase their own production
(ii) member countries set their level of production in order to capture a larger share of the total profit available
(iii) member countries abide by the regulatory policy set forth under the original collusive agreement
A)(i) and (ii)
B)(ii) and (iii)
C)(i) and (iii)
D)(i) only

Question

Quizplus · Accepted Answer

If member countries increase their own production and set their level of production to capture a larger share of the total profit available, it will lead to an increase in the global supply of oil. This increase in supply will drive down the world price of oil, weakening OPEC's effect on the price. On the other hand, if member countries abide by the regulatory policy set forth under the original collusive agreement, it will help OPEC maintain its market power and influence over oil prices. Therefore, options (i) and (ii) are the best choices to weaken OPEC's effect on the world price of oil.

Which of the Following Will Weaken OPEC's Effect on the World