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This is a Clilstore unit. You can link all words to dictionaries.

Types of market: Oligopoly

In our world there are different types of markets. A market of imperfect competition is the Oligopoly. The defining characteristic of Oligopoly is there are few companies in market which each one has to worry about reaction that will provoke in its rivals any action that it makes. 

In this type of competition a few producers monopolize all production of a homogeneous good, little diferentiable for consumers. We can differentiate two strategic behaviors: 

- Collusive markets (cartels). In these markets companies try to reach agreements to distribute the market production fee. (these are illegal in Spain, apart from OPEC)

- Non-collusive markets (strategies). In these markets companies compete with each other.  

 

 

A Collusive market very important is OPEC (Organization of the Petroleum Exporting Countries). The mission of the OPEC is to coordinate and unify the petroleum policies of its Member Countries and ensure the stabilization of oil markets in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers and a fair return on capital for those investing in the petroleum industry. 

According to current estimates, more than 80% of the world's proven crude oil reserves are located in OPEC Member Countries, with the bulk of OPEC oil reserves in the Middle East, amounting to 65% of the OPEC total.

OPEC Member Countries have made significant additions to their oil reserves in recent years, for example, by adopting best practices in the industry, realizing intensive explorations and enhanced recoveries. As a result, OPEC's proven oil reserves currently stand at 1.213,43 billion barrels. 

 

Activity:

Observe the following vignette and answer:

1. What kind of market is fuel?

2. Who is beneficied in this type of market? Compare this market with others studied. 

Clilstore OPEC websiteExercise1Exercise2Exercise3

Short url:   https://clilstore.eu/cs/5399