Problem: This written assignment will cover the topics demand and supply and the implication of elasticity.
Question: In the 1970s, members of OPEC (Organization of the Petroleum Exporting Countries) decided to raise the world price of oil in order to increase their incomes. These countries accomplished this by jointly reducing the amount of oil they supplied.
From 1973 to 1974, the price of oil (adjusted for overall inflation) rose more than 50%. By 1990, the price of oil (adjusted for overall inflation) was back to where it was in 1970.
Instructions: To answer the given question, research on the trend for prices of oil from 1970 - 1990. Apply the concept of demand, supply and elasticity to analyse the trend. Draw graphs and explain them.
Why did OPEC fail to keep the price of oil high?
Learning Outcomes: a) Analyse, individually and in teams, the role of fundamental micro- and macroeconomic principles in business decision-making.
b) Analyse the impact of industry competition on individual businesses.
c) Analyses, from an economic and ethical perspective, business behaviors in a national and global context.
d) Analyse the impact of monopolies and monopolistic competition within an industry.
e) Evaluate the impact on industry of manipulations of economic factors by the public sector.
f) Communicate complex economic concepts to business professionals.
1. Wikipedia and Investopedia are not acceptable sources
2. Diagrams drawn using a drawing package that produces images acceptable to Word
3. Use the APA 6th Edition Referencing style.
4. Reference list, appendices and calculations are not included in word count.