(a)[2]
Define what is meant by a cartel.
(b)[3]
‘Russia and the US are not members of OPEC, but they engage in collusion with the cartel.' Explain what the term collusion means in the context of an oligopoly.
(c)[7]
The oil production methods used by Saudi Arabia and the US have different shares of fixed costs and variable costs. Analyse why the fall in the price of oil may have a more significant effect on the output of oil in the US.
(d)[8]
Discuss, with the use of AD/AS diagrams, how Russia and Saudi Arabia are likely to respond to lower oil prices.