|
|
This is only a preview of the paper
Click here to register and get the full text.
Existing members click here to login
|
|
|
... To better understand oligopolies, one must realize that oligopolies are neither purely competitive nor monopolistic, they fall somewhere in the middle of these two. ... Take for example, the oil industry, which converts crude oil into kerosene, gasoline, and motor oil. These oil companies get loans to put out the newest and best type of product first into the industry. ... It was recorded in 1939 that oligopolies accounted for 36% of the national income; the number has recently dropped to around 18%.
In this paper our current oil crisis and the oligopoly of the industry will be discussed. To compare the oil oligopoly and microeconomics, one must first know what microeconomics exactly means. ... In relating the oil oligopoly to the economy, we must also view the larger picture. For example, the individual consumer of an oil related product in this instance will be gas. ... However, the government and oil industries know that Americans must have gasoline. ... In relating oil and microeconomics, one must view the choices a consumer will make if gas prices were to skyrocket in certain geographical areas. ...
Gasoline comes from a much more raw substance called crude oil. Crude oil is a substance that seeps from parts in between our Earth’s crevices. It has been researched that crude oil has been used for a type of fuel since as early as 3500 B. ... The first man to mine crude oil would be Dr. ... It was in 1854 when the first oil company named “The Rock Oil Company” was established in Pittsburgh, Pennsylvannia. In 1859 the first oil drill in the U. ... Rockefeller founded the Standard Oil Company on June 10th, 1870. And by 1879, Rockefeller had acquired 80% of the refineries and 90% of the pipelines in the oil industry. ...
The next large breakthrough for crude oil was by Joseph S. ... Cullinan was the first to convert oil into a diesel fuel for locomotives, and also managed to use oil to settle dust in undeveloped streets. By the late 19th century, crude oil would be a much needed commodity in our society.
Americans do not have an important use for crude oil itself. Their needs are for the refined after product, which in many cases now is motor oil, gasoline, and even cosmological supplies. The United States’ urgent oil ‘crisis’ is affecting every individual with an automobile, because gas now ranges from $1. ... Opportunity costs were rising for companies who found an abundance of optional ways to convert crude oil. ... And with the ever growing advancement of technical equipment, crude oil will continue to be required. ...
Part II
Within the realm of oligopolies, there are few who are helped and many who are hurt by this type of market structure. ... com, the top oil producers in America are ExxonMobil, followed by BP, ChevronTexaco, and Royal Dutch/Shell. ... This is mainly due to the fact that oligopolies are less regulated than monopolies, and their economic activities aren’t supervised and overseen as much, either. ...
Another way that oligopolies stay in power is due to the fact that they tend to have large research and development facilities, and this leads to a more rapid rate of product improvement. ... Now if the oil industry was a perfectly competitive market, everyone’s production costs might be much higher, which could easily result in higher prices across the board for all of us. Oligopolies also help our economy- they provide employment which provides stable income for households, their revenues are taxed by the state and federal government, and sales tax is levied on all of the goods and services they produce. ... But there are downsides to having an oligopoly in the oil industry, and they range from very minor to quite significant.
The most obvious negative effect that oligopolies have is that they squash the smaller competition, leaving them with little hope of ever reaching triple digit revenues (in millions, that is). ...
The oil industry is hurt by oligopolies in the legal area as well. ... The combination of these illegal tactics used by oligopolies has definitely hindered their success, but Taylor notes that these practices aren’t used as much as they have been in previous decades. ...
In general, oligopolies tend to slow the overall rate of technological progress, and this is quite evident within the oil industry. ... With an oligopoly, the way to benefit the most is to keep prices stable among the four, and this quickly leads to a situation where prices become inflexible- if this escalates too quickly, an ‘oil crisis’ may occur when there is no actual reason for alarm. This has many effects, including a reduced amount of output (crude oil) that leads to increased prices for everyone while the oligopoly reaps the enormous benefits. ...
Part III
To understand the oil crisis that America and various European countries are facing, one would have to look at how things work within the companies themselves. Secondly, one will have to know what oil does for America and Europe, and what products are made from oil.
The oil companies that are known today are Exxon (or Esso), Shell, BP, Gulf, Texaco, Mobil, and Chevron. ... Due to the vast increases made between the first two companies, we can almost assume that ExxonMobil is either in there on additional marketing business, or they’re not depending on the crude oil that is being exported from many other countries, i. ...
In fact, it states in an article by Hoover’s Online, titled “Fact Sheet,” that ExxonMobil is engaged in oil and gas exploration, production, supply, transportation, and marketing around the world.
Approximate Word count = 4630
Approximate Pages = 18.5
(250 words per page double spaced)
|
|
|
|
|
|