Himalaya Ban

“People of the same trade seldom meet together , but the conversation ends in a conspiracy against the public, or in some diversion to raise prices .”

Adam Smith from The wealth of Nations.

OPEC( Organization of Petroleum Exporting Countries)

• Established in 1960• Consists of 13 oil exporting nations• Controls 75% of the oil reserves• Goal is to maintain high oil price

OPEC AND THE WORLD OIL MARKET

What did OPEC do?

Conclusion

• Oligopoly firms maximize their total profit by forming a cartel and acting like monopolist

• Self interest drives from cooperation even when it is in their mutual interest