Macroeconomic: Economics and Gas Oil
MACROECONOMIC ANALYSIS
Russ Graziano
ECON 545
Keller Graduate School of Management
April 13, 2014
Introduction The idea Edgar has for opening up four new gas stations is based on a well based argument making it viable as a profitable business venture. The evaluation on the American consumer to accept the high price for gas oil prices forms the first approach towards establishing a business. Gasoil businesses in the world run as cartel where it supply and prices are determined by the few stakeholders in the industry. The stakeholders form an agreement among their competitors on the price, making and, marketing of the product (Fredy, 2010). The cartel though the production affects the GDP growth rate. Gross domestic product represents the monetary value of the goods produced in the country within a year.
The enterprise runs as an oligopoly. An oligopoly represents a business type where there are few sellers in the market. The few sellers are due to the restriction imposed on entry to a monopoly. The production rights are restricted by the producer and the producer also controls the prices of the commodity (Brake, 2011). Unemployment will be apparent as the restriction holds down people with the relevant skills to join in the trade.
Price control is done through price fixing and determining the market share. The market shares will go a long way to influencing international trade. International trade represents trade past the nation boundaries (Derik, 2010) . The main purpose of a cartel is profit increment to the individual by reducing competition. Edgar by starting up the gas oil business will gain profit margin from the monopoly.
The government is also be involved in the control of the production rights of such a cartel. It is through fiscal policies that the government will regulate such ventures with an aim to protect the public from exploitation. Fiscal policies tools are the government imposition on tax and
Russ Graziano
ECON 545
Keller Graduate School of Management
April 13, 2014
Introduction The idea Edgar has for opening up four new gas stations is based on a well based argument making it viable as a profitable business venture. The evaluation on the American consumer to accept the high price for gas oil prices forms the first approach towards establishing a business. Gasoil businesses in the world run as cartel where it supply and prices are determined by the few stakeholders in the industry. The stakeholders form an agreement among their competitors on the price, making and, marketing of the product (Fredy, 2010). The cartel though the production affects the GDP growth rate. Gross domestic product represents the monetary value of the goods produced in the country within a year.
The enterprise runs as an oligopoly. An oligopoly represents a business type where there are few sellers in the market. The few sellers are due to the restriction imposed on entry to a monopoly. The production rights are restricted by the producer and the producer also controls the prices of the commodity (Brake, 2011). Unemployment will be apparent as the restriction holds down people with the relevant skills to join in the trade.
Price control is done through price fixing and determining the market share. The market shares will go a long way to influencing international trade. International trade represents trade past the nation boundaries (Derik, 2010) . The main purpose of a cartel is profit increment to the individual by reducing competition. Edgar by starting up the gas oil business will gain profit margin from the monopoly.
The government is also be involved in the control of the production rights of such a cartel. It is through fiscal policies that the government will regulate such ventures with an aim to protect the public from exploitation. Fiscal policies tools are the government imposition on tax and