Oligopolistic Market Model and Oil Prices

Oligopolistic Market Model and Oil Prices Executive Summary The report is prepared to explain how oligopolistic market model is the best model to relate to the current increase in the price of Oil. The Oil petroleum Organization is analyzed deeply which clearly depicts the oligopoly style of marketing by the members of OPEC. It has also examined by lot of research and based on recent reports that the OPEC tries to influence the oil prices by controlling the supply of oil production with the consent of all the members and tries to fix the oil prices in order to gain heavy profits. OPEC works on the same rule as followed by oligopoly market structure and hence clearly indicates its relation to each other and is best example of oligopoly market style. 1.0 Introduction The Oligopoly market structure is the market which has few producers and large number of buyers which gives these producers an advantage to control the market. According to (Scholasticus, 2010), the buyers have very less alternatives and do not have enough knowledge about the market. The producers inflate the prices of their goods to attract more customers by reducing prices leading to deflated price level.ÂÂ   Based on Scholastics writing in one of its articles, the producers have perfect knowledge of the consumers but consumers do not have any information about the producers or their act of influencing the prices has a negative effect on national economy. 2.0 Discussion 2.1 Features of Oligopoly Market There are few producers and large number of buyers. The producers deal in differentiated products. (Jayasuriya, 2011, p. 87) One of the producer or firm become the leader of the group and makes others to agree or dominates them to fix the prices which results in price leadership. The competition in an Oligopoly market is intense and both price and non-price methods are used to attract more customers. For example in lot of advertisements, producers mention We will not be beaten on price. The price will be matched with the competitor selling price (Labs S. S.) In Oligopoly market, firms or producers get together to share a market and decide on prices. Because of an uncompetitive market structure, they enjoy heavy profit by raising the prices or lowering the prices to attract more customers resulting in entry barriers to this market. (Labs S. S.) According to recent study by Stanley St Labs., the competition is very different in oligopoly as compared to other markets forms. In other markets, it is violent because of the high competition to gain the market share but in oligopoly, the firms are interested to gain the market share by collaborating to earn heavy profits. Firms are mutually interdependent which means if one firm changes its prices, it will affect the sales of other firms. 2.2 Kinked Style Demand Curve According to (Stewart Rankin, 2008, p. 141), the oligopoly market structures have kinked demand curves and the demand curve for the product has two sections called inelastic and elastic section. demand curve.png Kinked Demand Curve The elasticity of demand depends on the amendments of rival companies price or service output. The assumption made here is that the all the companies would want a considerable market share along with heavy profits: There is no increase of price by one particular firm. This is elastic demand. There would be an adverse impact on the total revenue of the company. In a situation where the rival company reduces it prices in order to maintain its market share, it would be an inelastic demand curve. Due to reduction in prices again, this would impact the total revenue of the company. The Price warsÂÂ  between the firms does not benefit anyone but it benefits the consumers in fact. (ecoteacher) Based on the above graph, we state it faces kinked style demand curve because of these reasons: It shows price rigidity. It controls the market segment. Leader decides the market Price and others agree to it. It results in Mergers/cartels and collusion to control market. Producers decide on prices with the consent of others. It has Horizontal and Vertical Integration. 2.3 Few Industry examples given by Economists teachers society of South Australia are: The grocery market in Australia is oligopoly which is dominated by Woolworths and Coles. They have lot of stores in Australia and have an extensive distribution system across Australia. It is difficult to compete with these firms as it requires huge investment to gain the kind of market share as they have. The Automobile Industry is a form of oligopoly market. The world Oil production market or Oil refining is also another oligopoly dominated by the seven sisters multinational oil companies like BP, Shell, and Exxon. The telecommunications market in Australia was initially aÂÂ  monopoly but as new telecom service providers started operating, it resulted in a group of few giant telecom providers competing for a greater market share. 2.4 INTRODUCTION OF OPEC According to the OPEC Organization, OPEC is the intergovernmental organization (Organization of the Petroleum Exporting Countries) consisting of 12 oil producing and exporting countries across America, Asia and Africa continents. The members are Algeria, Angola, Ecuador, the Islamic Republic of Iran, Iraq, Kuwait, the Socialist Peoples Libyan Arab Jamahiriya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates Venezuela. (About Opec, 2011) A report (OPEC organization, 2011) states that it was formed on September 14, 1960 in Baghdad, Iraq, by five Founder Members: Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. It was registered with the United Nations Secretariat on November 6, 1962 (UN Resolution No 6363). OPEC organization (2011) indicates their principal objectives as: To develop and maintain the petroleum policies for the Members Countries to safeguard their interests. To ensure the stability of the prices in the international oil markets to eliminate the unnecessary price fluctuations To provide a regular supply of petroleum to the nations while expecting a fair return on the petroleum industry investment. 2.5 OPEC: Oligopolistic market model TheÂÂ  Organisation of Petroleum Exporting CountriesÂÂ  orÂÂ  OPECÂÂ  is an oligopoly market which is dominated by the Arab oil producers as they hold the maximum amount of oil refineries which gives them an opportunity to dominate others and decide on prices. Cartel is another name for an oligopoly of producers of a commodity. (About Opec, 2011) The Members of OPEC tries to influence the world oil prices with the consent of all and they set the production quotas and become an effectiveÂÂ  cartelÂÂ  by restricting the sales. They deeply analyse the current market situation and anticipate future demand and supply to see various fluctuations of prices in the markets. After analysing the market scenario, they decide to raise or lower the oil production as agreed by all the members to maintain price stability and make the oil available for consumption. (corporation, 2003-2011) According to (Oil :Crisis and Collusion, 2011), OPEC was organized with the purpose of manipulating the oil prices by controlling oil supplies to the market. It controls approximately 80% of the worlds oil reserves and 40% of the worlds production among their 12 member states. As discussed earlier, it is dominated by Gulf States who can easily turn the taps on and off when required to influence the market prices. Even when the economy was facing an issue of recession, it did not have any effect on oil industry and were still making heavy profits. Hence, we can say that OPEC does play an important role in making decision of oil supply to the market which may affect the oil prices in a greater extent. The members have larger number of oil reserves and can increase or decrease the production or supply whenever they want. As they very well know that all the developing and developed nations wants oil and has almost become the necessity of life like food in todays lifestyle, so they try to earn as much as they can by controlling the prices with the kind of power they hold in their hands. However, we may say that OPEC has oil reserves and cannot produce more oil as they do not have any more oil reserves as overestimated by us. There can be lot of other reasons as well which may give rise to the oil prices like any commodity price fluctuation due to the demand and supply effect. (Savage, 2008) 2.6 Advantages and Disadvantages of Oligopoly Market Structure The cost of a service of product in under oligopolistic tend to be lower in comparison to that of a monopolistic firm, but more than a competitive market. There is stability in pricing; however the prices would lead to reduction if any other firm reduces. This will impact the profitability of the companies giving a benefit to the customer. As there are barriers to join oligopolies, it gives the firms cost advantages. This is because they would cater to mass production. Consequently it encourages having highly competitive production processes which than improvises the service delivery. (William Boyes, 2008) 3.0 Conclusion To conclude, we can say that OPEC is an oligopoly form of market structure where few nations who have oil reserves decide on the current production and supply of oil with each other consent which directly influences the price of oil. Hence, oligopolistic market structure model explains the behaviour of oil industry and its effects on the market prices. In a recent report (corporation, 2003-2011) states that United States, Canada, Mexico, Russia and China also produces oil and are expected to reduce the need for gasoline in future through its improved techniques and research and development in other forms of energy which will also reduce the affect of dominance of OPEC on the price of oil.

Primary Health Care Essay -- Health, Policies, Regulations

Part A Primary health care evolves from the economic, cultural, social, and political conditions of a country, and it is described as an essential part of health care that is universally provided to individuals in a community at the country's and community's expense (World Health Organisation [WHO], 1978). The goal of primary health care is to address the main local health problems, but it involves community education about these problems in addition to providing disease treatments (WHO, 1978). Furthermore, primary health care is concerned with nutrition promotion, sanitation standards, family planning, immunisation, disease control and prevention, and it promotes and relies on community and individual participation in primary health care functions (WHO, 1978). Population health is concerned with policies and interventions that result in positive health outcomes within a community and further distribution of these outcomes among the individuals of the community (Kindig and Stoddart, 2003). Primary health care and population health overlap and complement each other because primary health care builds the fundamental infrastructure of the national health care system (WHO, 1978), so other aspects of national health care are built upon the principles, organisation, and functions defined in the country's primary health care policies and regulations. For example, primary care is provided to individuals, and population health is concerned with community health. However, population health depends on proper individual care because individuals with potentially communicable disease can be a threat to public health, so population health can plan its interventions in the community based on evidence collected from primary health observations... ...r intervention accordingly. Item #6. Finally, the issue of an influenza pandemic must be addressed by agencies and organisations other than health care providers, so the occupational health nurse in the role of the educator will notify and counsel boarder controls, travel agencies, and all international organisations about proper rules and regulations in this situation because entering and leaving Australia during a pandemic should not be allowed without proper vaccination. Although quarantines have proven ineffective against flu pandemics in the past, and a 90% air travel restriction can delay the pandemic by no more than two weeks (GlobalSecurity.org, 2011b), making vaccination obligatory for travellers should not be overlooked because it can both slow down the progress of the disease within the Australian community and prevent spreading it to other communities. Primary Health Care Essay -- Health, Policies, Regulations Part A Primary health care evolves from the economic, cultural, social, and political conditions of a country, and it is described as an essential part of health care that is universally provided to individuals in a community at the country's and community's expense (World Health Organisation [WHO], 1978). The goal of primary health care is to address the main local health problems, but it involves community education about these problems in addition to providing disease treatments (WHO, 1978). Furthermore, primary health care is concerned with nutrition promotion, sanitation standards, family planning, immunisation, disease control and prevention, and it promotes and relies on community and individual participation in primary health care functions (WHO, 1978). Population health is concerned with policies and interventions that result in positive health outcomes within a community and further distribution of these outcomes among the individuals of the community (Kindig and Stoddart, 2003). Primary health care and population health overlap and complement each other because primary health care builds the fundamental infrastructure of the national health care system (WHO, 1978), so other aspects of national health care are built upon the principles, organisation, and functions defined in the country's primary health care policies and regulations. For example, primary care is provided to individuals, and population health is concerned with community health. However, population health depends on proper individual care because individuals with potentially communicable disease can be a threat to public health, so population health can plan its interventions in the community based on evidence collected from primary health observations... ...r intervention accordingly. Item #6. Finally, the issue of an influenza pandemic must be addressed by agencies and organisations other than health care providers, so the occupational health nurse in the role of the educator will notify and counsel boarder controls, travel agencies, and all international organisations about proper rules and regulations in this situation because entering and leaving Australia during a pandemic should not be allowed without proper vaccination. Although quarantines have proven ineffective against flu pandemics in the past, and a 90% air travel restriction can delay the pandemic by no more than two weeks (GlobalSecurity.org, 2011b), making vaccination obligatory for travellers should not be overlooked because it can both slow down the progress of the disease within the Australian community and prevent spreading it to other communities. Primary Health Care Essay -- Health, Policies, Regulations Part A Primary health care evolves from the economic, cultural, social, and political conditions of a country, and it is described as an essential part of health care that is universally provided to individuals in a community at the country's and community's expense (World Health Organisation [WHO], 1978). The goal of primary health care is to address the main local health problems, but it involves community education about these problems in addition to providing disease treatments (WHO, 1978). Furthermore, primary health care is concerned with nutrition promotion, sanitation standards, family planning, immunisation, disease control and prevention, and it promotes and relies on community and individual participation in primary health care functions (WHO, 1978). Population health is concerned with policies and interventions that result in positive health outcomes within a community and further distribution of these outcomes among the individuals of the community (Kindig and Stoddart, 2003). Primary health care and population health overlap and complement each other because primary health care builds the fundamental infrastructure of the national health care system (WHO, 1978), so other aspects of national health care are built upon the principles, organisation, and functions defined in the country's primary health care policies and regulations. For example, primary care is provided to individuals, and population health is concerned with community health. However, population health depends on proper individual care because individuals with potentially communicable disease can be a threat to public health, so population health can plan its interventions in the community based on evidence collected from primary health observations... ...r intervention accordingly. Item #6. Finally, the issue of an influenza pandemic must be addressed by agencies and organisations other than health care providers, so the occupational health nurse in the role of the educator will notify and counsel boarder controls, travel agencies, and all international organisations about proper rules and regulations in this situation because entering and leaving Australia during a pandemic should not be allowed without proper vaccination. Although quarantines have proven ineffective against flu pandemics in the past, and a 90% air travel restriction can delay the pandemic by no more than two weeks (GlobalSecurity.org, 2011b), making vaccination obligatory for travellers should not be overlooked because it can both slow down the progress of the disease within the Australian community and prevent spreading it to other communities.

Punishment fit the crime Essay

The just-desert approach to sentencing aims to â€Å"make the punishment fit the crime. † Just deserts is a very old idea revived periodically when officials are desperate for a simple solution to the crime problem. It swept the United States with some success in the 1970s because a few articulate professors and others, when disillusioned with the rehabilitation emphasis of the preceding decades, momentarily overlooked the realities of criminal justice system. They were charmed by the simplicity of prescribing the same penalty for everyone convicted of the same offense, and their rhetoric implied that this would somehow maximize both fairness and crime prevention. The just deserts perspective emphasizes punishment in proportion to the amount of harm done and the rated culpability of the criminal actor. The just desert model of sentencing is based on a philosophy of retribution. Founded on the Principle of Commensurate Deserts, the just desert model holds that punishment should be proportional to the seriousness of an offender’s criminal conduct. This principle is defined by the harm done and the level of culpability attributed to the offender. These principles, in certain important respects, recall the arguments of the classical criminologist Cesare Beccaria (1738-94) for due process in the criminal justice system and are based on a similar understanding of the social contract, which is supposed to apply equally and fairly to everyone. Retributive punishment is thereby regarded as ensuring that offenders do not profit from their wrongdoing. Yet as critics have argued, the fundamental flaw in this line of thinking is that it is applicable only if social relations are just and equal, otherwise there is no equilibrium to restore. In reality, offenders tend to be already socially disadvantaged, so that punishment actually increases inequality rather reducing it (Cavadino and Dignan 42). Sometimes just desert can be negative in the sense of unwanted, as well as something regarded as a good. The fact that the Nazi war criminals did what they did means they deserve punishment: We have a good reason to send them to jail, on the basis of just desert. Other considerations, for example, the fact that nobody will be deterred or that the criminal is old and harmless, may weigh against punishment, and we may even decide not to pursue the case for that reason. But, again, that does not mean that deserving to be punished is irrelevant, just that we’ve decided for other reasons to ignore desert in this case. But again: A principle’s being outweighed is not the same as its having no importance. Expressing both equality and entitlements, our social moral code pulls in different directions. How, then, are we to determine when one principle is more important? Unless we are moral relativists, the mere fact that equality and entitlements are both part of our moral code does not in itself justify a person’s reliance on them, any more than the fact that our moral code once condemned racial mixing while condoning sexual discrimination and slavery should convince us that those principles are justified. Because we know that the rules that define acceptable behavior are continually changing, and sometimes changing for the better, we must allow for the replacement of inferior principles with more reasonable guidelines. There is perhaps a stronger moral argument for the use of the just desert rooted in death penalty (Reiman, 1988). By deliberately causing the death of another, the murderer incurs a moral debt: the loss of his or her own life is earned as a just desert. By taking another person’s life, the offender has treated their victim as having lesser worth than they afford to themself, as presumably they would not willingly accept the same act to be inflicted against themself. Capital punishment for those who commit murder restores an equilibrium. The wrongdoer experiences suffering to the same extent that they inflicted upon another. The ‘golden rule’ of ‘doing unto others what one would want others to do unto one’ is restored, as the punishment impresses upon the offender that their worth is equal to that of their victim. It also has a symbolic value by reaffirming publicly the moral commitment to the ‘golden rule’ as a societal value. On these grounds, Rawlings (1999) defends just desert in principle. He opposes it in practice, however, as in the United States, imposition of the death penalty is discriminatory. To take just one example: the odds of a black person being sentenced to death for the murder of a white victim are far higher than the corresponding odds when a white person murders a black victim. Restorative justice is not without its critics, who point out that there are few safeguards to protect the most vulnerable groups from the pious moralizing of reintegrative shaming. This absence of accountability compounds the lack of protection for the offender in terms of appeals to legal process and due rights. Fundamental issues remain over whether just desert challenges social control or casts the net of social control deeper into the community. References Cavadino, M. and Dignan, J. (2002). The Penal System: An Introduction, 3rd edn, London: Sage. Rawlings, P. (1999). Crime and Power: A History of Criminal Justice, 1688-1998, Harlow: Longman. Reiman, J. (1988). ‘The Justice of the Death Penalty in an Unjust World’, in K. Haas and J. A. Inciardi (eds) Challenging Capital Punishment: Legal and Social Science Approaches, Newbury Park, CA: Sage.

Ethics and Education Essay - 925 Words

Ethics and Education Ethics and Morals are two important words everyone knows, but which very few truly understand. Ethics is defined, in Websters Ninth New Collegiate Dictionary, as the discipline dealing with what is good and what is bad. Morals are defined, in the same dictionary, as those principles of right and wrong in behavior. For Kozol in The Night Is Dark and I Am Far From Home, ethics and morals have similar definitions but extend to include a sense of compassion for others. I agree with his argument that the purpose of schooling is to educate an ethical human being: a person who not only lives his life by facts and knowledge but also by ethics and morals. The need for schools to address ethics and morals is important†¦show more content†¦Since in school are where children interact most often with any adult, it should be standard for schools to have ethics and morals in their curricula. However, the decision of what ethics and whose morals to include in curricula poses a problem for many schools. With so many different ways of thought and senses of morality, the ability to decide on one standardized set of ethics and morality proves to be almost impossible. The decision is also difficult since morality at times is synonymous with religion and deciding on a particular set of morality can be interpreted as favoring a certain religion within a school. Other problems with this system are a teachers possible conflict with certain ethical and moral issues they may have to convey to their students. What if a teacher does not believe in a certain ethical guideline in the curriculum or what if they do not believe an ethical decision is required for a certain discipline? A system of ethics which encompasses many beliefs, yet does not isolate one exactly, is the only useful method in a school. 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