Competition (BUSINESS 305 CASE ASSIGNMENT MODULE 3) Essay

aspiration (BUSINESS 305 CASE ASSIGNMENT MODULE 3) - Essay ExampleWhile it may stand to reason that OPEC with its sportsmanlike share in percentage of global oil production is able to effectively manage prices, it hasnt necessarily happened that way. Increasing pressure from other factor including competing regions outside OPEC such as North sea and Central Asian states, has resulted in large fluctuations in oil prices in recent past.Formed mainly to look after the oil exporting interests of part countries, OPEC has a clear set of objectives where it claims to balance member country requirements with needs to stabilize world oil prices. Its charter states that OPEC would strive to eliminate harmful and excess fluctuations in global oil prices and ensure efficient, economic and regular supply to buying nations while at the same time coordinating among member countries to share and unify oil policies to protect their interests (OPEC Statute 1). as yet though the oil cartel has be en a major force in global economy for everywhere 45 years, it has had its own set of shortcomings in vision. At least twice in the past OPEC time-tested to raise prices by reducing export of oil. In the first instance, in the early 70s, the prices bar by about 50% and in the second case, the maximum increase was 34% in 1980. In each period of OPEC intervention, the price increase was short lived and could not be maintained.The reason for not existence able to sustain the price increase is rooted in the simple definition of economy that it is governed by people and its behavior. This behavior then defines the supply and bespeak relationship that forms the basis for price stability and trends.The fast rise in oil prices as a result of OPECs cutting of exports happened because the supply and demand of oil, like any other commodity, is inelastic in the short term. When the OPEC countries