question 2\neach member of opec can increase its income by selling more oil than its output quota because\n…

question 2\neach member of opec can increase its income by selling more oil than its output quota because\n- each members demand is more elastic than the total demand for oil.\n- by selling more at opecs cartel price, a member will automatically earn more income.\n- the demand for oil is perfectly elastic.\n- the demand for oil is inelastic so total revenue increases.

question 2\neach member of opec can increase its income by selling more oil than its output quota because\n- each members demand is more elastic than the total demand for oil.\n- by selling more at opecs cartel price, a member will automatically earn more income.\n- the demand for oil is perfectly elastic.\n- the demand for oil is inelastic so total revenue increases.

Answer

Brief Explanations:

When the demand for a good is inelastic, an increase in quantity sold leads to an increase in total revenue. OPEC members face inelastic demand for oil in the short - run. Selling more oil (beyond quota) at the cartel price will increase their individual revenues. Each member's demand is more elastic than the total demand for oil, but the main reason for revenue increase is the inelastic nature of overall oil demand. The demand for oil is not perfectly elastic.

Answer:

the demand for oil is inelastic so total revenue increases.