How are such cartel expected to help the developing country, International Economics

Assignment Help:

Q. Developing countries have often attempted to establish cartels so as to counter the perceived or actual inexorable downward push on the prices of their exported commodities. OPEC is the best well known of these. How are such cartels expected to assist the developing countries? At times importing countries profess support for such schemes. Will you think of any logical basis for such support? How cartels are like monopolies, and how are they dissimilar from monopolies. Why is there a presupposition among economists that such schemes are not likely to succeed in the long run?

Answer: Such cartels are expected to shift the exporters' terms of trade in their favour. As well they are expected to produce the maximum profit which the market will bear. Importing countries may perhaps benefit from the price stability generated by the cartel. Cartels are similar to monopolies in that their total output is the same as that which would be generated by a single monopoly. They are different from monopolies in that the monopoly profits require to be divided among the producing countries which have different cost structures.


Related Discussions:- How are such cartel expected to help the developing country

Explain how brazil was able to reduce the rate of inflation, Q. Expla...

Q. Explain how Brazil was able to reduce the rate of inflation from 2,669 percent in 1994 to less than 10 percent in 1997? Answer: By initiating a new currency and init

Theories about the problems of lower income countries, Theories about the P...

Theories about the Problems of LICs are discussed below: In order to explain this big problem of poverty and of the asymmetric ownership of the wealth and income in the world,

Relationship b/w u.s. real money supply and dollar exchange, To answer the ...

To answer the following question, please refer to the figure below.Concentrating only at the lower left quadrant, discuss the relationship between the U.S. real money supply and th

#Tariff quota, Ask question #Effects of Tariff quota#

Ask question #Effects of Tariff quota#

Assignment, Road,railway,air and shlping transportation

Road,railway,air and shlping transportation

Effects of an increase in the money supply, Q. What will be the effects of ...

Q. What will be the effects of an increase in the money supply on the interest rate? Answer: An enhance in the money supply will origins the interest rate to decrease. This m

Explain why east asian countries have done so well, Q. Explain why East Asi...

Q. Explain why East Asian countries have done so well relative to South American countries. Answer: Generally the reasons are less moral hazard less government debt to forei

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd