Year without Oil
OPEC Oil Embargo
There are several things that come to mind when presented with the picture and topic, but the one that stands out most is shortage. However, shortage is an ironic word to use for it. It wasnÕt really a shortage in the fact that the world is out of oil, which being a non-renewable resource will be one day, but it was an incredible 130% increase in price by OPEC, Organization of Petroleum Exporting Countries. This forced the petroleum market to head into a tailspin.
OPEC, started by the major oil producing countries in the Middle East, was designed to give price control to the oil producers, instead of the oil manufacturers. Formed in 1960, OPEC was only a middleman for 10 years, but in the 1970Õs, they found the right time to drive up the price of gas. One viewpoint can say it was about time that we started paying these countries for what they were up to that point, "giving us," but from the other standpoint, OPEC is no more than a cartel and monopoly. A cartel is two or more parties, the oil producing countries, hurting an innocent third party, oil consumers. OPEC was created to hurt the oil manufacturers who were taking advantage of the oil producers, but unfortunately the one that got hurt from the agreement are the oil selling stations and us, the consumer.
There are several reasons why it isnÕt the manufacturers didnÕt get affected by any of the price raises. First of all, no matter how high the price of crude oil goes, the world still has to keep buying oil products. In fact, the world is using more petroleum products now than it ever has before, and can only get it from a few manufacturers, which means a monopoly is feeding an oligopoly.
Monopolies are when the economy relies on one source for all of a product, also called a trust. Monopolies are banned in the United States by Anti-Trust Laws. Oligopolies are products, that the economy relies on, that are only available from a few sources. In a large market, the oil market, these companies can raise prices for consumers and receive massive increases in their profits.
"To really understand the hardships that happened in the 1970Õs, and not being around in that time, we can look at the situation we are experiencing today.
Both the CEO of Exxon, Lee Raymond, and the CEO of Mobil, Lucio Noto, announced that it is because of this reduction in prices and downsizing within the oil industry that the merger is taking place, the very nature of the oil industry was becoming increasingly competitive. The oil industry as whole was becoming more efficient, causing oil prices to fallr. Firms can only maintain their prices equal to or above marginal cost, and if prices are lower than marginal...
The energy crisis of the 1970’s caused authorities to search out other renewable sources of energy, which currently remain undeveloped and keep the U.S. today generally dependant on foreign fuel. According to Merriam Webster dictionary, a crisis is a “difficult or dangerous situation that needs serious attention.” The energy crisis of the 1970’s produced a backlash that affected much of the economy and spread fear and panic over the United States.
Why now? This a complicated question, but it boils down to the simple economics of supply and demand. Supply and demand means a relationship between how much of a particular product is available and how much of it people want, and especially the way that this affects the level of pricing. Now of course there would be a shortage of gasoline during the summer time when everyone is traveling Brent crude, the main international benchmark, was trading around $48 a barrel. The American benchmark was at around $45 a barrel (Clifford Krauss).
The rape of Nanking occurred during World War II by the Japanese onto Chinese civilians. Nanking was a newly established capital in the Republic of China that was a part of the plan of attack for the Japanese to assert its power in Asia. While the Chinese had them outnumbered greatly, the Japanese utilized the power of deception in order to make their way into the city of Nanking. For example, the soldiers would promise the Chinese fair treatment if they were to stop resisting the invasion. This plan worked exceptionally well, as the captives believed what they were told and allowed the Japanese to tie them up. Very few actually resisted the attacks and simply hoped they would be treated better by the Japanese if they complied.
The Elizabeth River Tunnel, downtown, and midtown tunnel tolls are completely unfair for anyone who lives or works in Portsmouth; people shouldn’t have to pay to drive to work, or even simply drive in their state. The tunnel tolls have forced people to rearrange their whole life because of one simple tax. There happen to be upsides to this new tax, which is that over the course of 58 years the infrastructure of the tunnel will be a lot stronger since the population in Virginia has increased.
Les Misérables (1862), a novel set in early nineteenth century France, presents a story of obsessions in honor, love, and duty, and through it redemption and salvation. It is the story of the poor Jean Valjean, condemned to an unfair amount of time in prison and a life on the run for stealing a loaf of bread for his starving family. The kind act of forgiveness from a Bishop with whom Jean Valjean stays one night, changes the course in which he chooses to live his life. Under a different identity, he becomes wealthy from a business he starts and later is elected mayor of the small town of Montreuil. He falls madly in love with Fantine, one of the workers in his factory. Because Fantine, one of the very poorest and most pitiful residents of Montreuil, has a child born out of wedlock, Jean Valjean as the respected mayor must keep his love for her a secret. When Fantine dies unexpectedly, Jean Valjean vows he will raise her daughter Cosette, and shield her from all the evils in the world. Through all of this, Jean Valjean is being pursued by Javert, a policeman whose entire life has been dedicated to finding Jean Valjean. While running from Javert, Jean Valjean and Cosette find themselves in Paris in the middle of the 1832 Revolution. As Cosette matures, she falls in love with Marius, a young revolutionist. Despite the objections of Jean Valjean, Cosette continues to secretly visit Marius at night. During the revolution, Marius is injured badly and Jean Valjean, after finding a love note from Marius to Cosette, quickly comes to the rescue of the wounded gentleman. Eventually Jean Valjean and Marius' Grandfather consent to the wedding of Cosette and Marius. In this novel, "there is a point at which...
Every day, millions of people are being diagnose with terminal illnesses or being seriously injured in accidents. Sometimes, those illnesses and accidents become long and agonizingly painful deaths. Although medication could briefly ease the pain, the long-term agony that the patient has to deal with is ceaseless. Undoubtedly, the human life has an enormous value and is for that reason that it should be preserved in all the possible ways. Nevertheless, when the terminal illness comes to its last stage, or the damage caused for an accident is too much to handle and the only option left is death, shouldn’t it be the patient’s decision to end its suffering and pain in a dignified way? Or in cases where the patient has an impediment to decide, shouldn’t the family have the option to give their loved one an end to its suffer? As part of a free society, euthanasia should be considered as a legal and humane option for patients suffering from terminal diseases and victims of accidents, mainly because is every human right to die in a decent way.
To understand the increase in gas prices, one must first identify the distribution of dollars paid per gallon at the pump. According to the U.S. Energy Information Administration (eia) in 2010, the annual average paid at the pump consisted of 68% crude oil, 7% refining, 10% distribution and marketing, and 15% taxes (see Fig.1). This shows an increase of crude oil over the 2000-2009 average of 51%. (e. I. Administration)
Oligopoly is a market structure where there are a few firms producing all or most of the market supply of a particular good or service and whose decisions about the industry's output can affect competitors. Examples of oligopolistic structures are supermarket, banking industry and pharmaceutical industry.
An oligopoly is defined as "a market structure in which only a few sellers offer similar or identical products" (Gans, King and Mankiw 1999, pp.-334). Since there are only a few sellers, the actions of any one firm in an oligopolistic market can have a large impact on the profits of all the other firms. Due to this, all the firms in an oligopolistic market are interdependent on one another. This relationship between the few sellers is what differentiates oligopolies from perfect competition and monopolies. Although firms in oligopolies have competitors, they do not face so much competition that they are price takers (as in perfect competition). Hence, they retain substantial control over the price they charge for their goods (characteristic of monopolies).
In 1970 oil reserves became more scarce, leading to a decrease in production, while consumption continued to grow rapidly (Wright, R. T., & Boorse, D. F. 2011). In order to fill the gap between rising demand and falling supply of oil, the United States became more and more dependent on imported oil, primarily from Arab countries in the Middle East. (Wright, R. T., & Boorse, D. F. 2011). As the U.S and many other countries became highly industrialized nations, they became even more dependent on oil imports. With demand being higher than the actual amount of supply, prices kept rising reaching a peak of $140 a barrel in 2008. (Wright, R. T., & Boorse, D. F. 2011).
Difference Between Oligopoly and Monopolistic Competition An oligopoly market structure is one in which there are a few large producers who are present in the industry and account for most of the output in the industry, there are many small firms but few large. firms dominate and have concentrated market share. Whereas monopolistic competition is a market structure that has a large number of sellers, each of which is relatively small and posse a very small market share. Another feature of an oligopoly is that there are some barriers to entry and exit into the industry.
In conclusion, OPEC's monopoly of the petroleum industry has been a strong one since the 1960's since its members enjoy economies of scale. Its decisions concerning the output of petrol have always been strong affecting the rest of the world. This monopoly is socially inefficient due to the output and the deadweight loss that results. Interestingly enough, to break this monopoly, the new Iraq has the potential to turn the market power around.
A Monopoly is a market structure characterised by one firm and many buyers, a lack of substitute products and barriers to entry (Pass et al. 2000). An oligopoly is a market structure characterised by few firms and many buyers, homogenous or differentiated products and also difficult market entry (Pass et al. 2000) an example of an oligopoly would be the fast food industry where there is a few firms such as McDonalds, Burger King and KFC that all compete for a greater market share.
With the government eventually breaking up the trust into thirty-eight companies, the world of petroleum products was about to change. Few companies could survive. They lacked focus and sustainability, basically they needed a strategic plan. When first broken up the companies needed to sever from their Standard ties while remaining a brand name that people recognized. With so much competition one company had to find an edge over the other. They needed to be the low-cost leader in the industry. Out of this struggle is where three of the biggest oil companies emerged. They are Exxon, Mobil and Chevron.