Question

Crude oil between 2015-2019

• Discover and describe the market structure of the good and specifically if there are any cartels/price fixing activities in the industry effecting the price changes discussed

Answer 1

In the oligopoly market structure cartel or price fixing activity take place. a collusion or a cartel is a combination of firms whose object is to limit the scope of competitive forces within the market. individual firms of a certain industry surrender to a central association the power to make price and output decisions. thus the cartel or collusive oligopoly assumes monopoly power that determines the price and output in the same capacity with zeal and just. perfect collusion implies cartel agreements which is an association of the independent firms within the industry. perfect cartel under oligopoly with complete control over the price and output policy of the member firms and with the threat of entry is a situation for consideration.

this market also face price fixing or price rigidity situation. the price that remain stable over a period of time is known as price rigidity. it is such a situation when there is a change in cost of production and demand conditions there is no change in the price of the goods and services from firm's side.