Question
Please provide the answers with detailed explanation either in writing or any means necessary. The Organization of the Petroleum Exporting Countries(OPEC) was formed on September
Please provide the answers with detailed explanation either in writing or any means necessary.
The Organization of the Petroleum Exporting Countries(OPEC) was formed on September 14th, 1960. inBaghdad, Iraq. At least twice a year, OPEC members meet to adjust OPEC's output level in light of anticipated oil market developments. OPEC's 11 members collectively supply about 40 percent of the world's oil output and possess more than three-quarters ofthe world's total proven crude oil reserves.Market supply and demand conditions for crude oil are
QS= 2P (Market Supply)
QD= 180 -4P (Market Demand)
Where Q is barrels of oil per day (in millions) and P is the market price of oil.
3.1 Calculate the equilibrium price-output solution. How much consumer surplus, producer surplus, and social welfare is produced at this activity level?
3.2 There is a change from a competitive market to a monopoly market. How much is the net gain in producer surplus.
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