All exercises are available on MyEconLab; =answer at the [&\*|=|answer at the&] back of this book; = use [&~bf~|eq| ~normal~use~norm~&] of calculus may be necessary.

1. Cartels

  1. 1.1 In most “normal” years (years in which the market has not been disrupted by Middle East wars), at each Organization of Petroleum Exporting Countries (OPEC) meeting, Saudi Arabia, the largest oil producer, argues that the cartel should cut production. The Saudis complain that most OPEC countries (including Saudi Arabia) produce more oil than they are allotted under their cartel agreement. Use a graph and words to explain why cartel members would produce more than the allotted amount despite their understanding that overproduction will drive down ...

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