1. The Organization of the Petroleum Exporting Countries (OPEC) was formed on September 14, 1960, in Baghdad, Iraq. The current membership is comprised of five founding members plus six others: Algeria, Indonesia, Iran, Iraq , Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela. OPEC's stated mission is "to bring stability and harmony to the oil market by adjusting their oil output to help ensure a balance between supply and demand." At least twice a year, OPEC members meet to adjust OPEC's output level in light of anticipated oil market developments. OPEC's eleven members collectively supply about 40 percent of the world's oil output and possess more than three-quarters of the world's total proven crude oil reserves. To demonstrate the deadweight loss from the monopoly problem, imagine that market supply and demand conditions for crude oil are