1 OPEC currently produces about 38 per cent of the world output of oil. Assuming the short-term price elasticity of demand is 0.28, estimate the effect of the output cut on the current price, stating any assumptions in your calculations. 2 Describe the factors currently driving the world demand for oil; why has the price not fallen below the $20 level as many expected? 3 Explain the effect of other non-OPEC producers on the cartel's output decisions