A cartel is a company with a very unique position with the opportunity to use a simple model to optimize pricing. It is an organization with a very desirable position in the world; very few companies can have the opportunity to set their own prices without significantly losing market share. OPEC is considered a monopolistic-cartel type organization. Firm's Demand Curve This type of structure has the advantage that as oil prices rise, it can shift the demand curve. The model allows for backstop technology and tariffs on oil imports; therefore, imposing tariffs on importing countries will reduce OPEC prices without affecting domestic prices. OPECFor years the Organization of the Petroleum Exporting Countries (OPEC) can be used as an example of a successful cartel. OPEC raised prices to consumers, made a fantastic amount of money, and survived for years. Today, in the United States, it can be appreciated that, relying on political speed, the organization took advantage and maximized its gains, because the internal cartel led by: Exxon, Chevron and Conoco-Phillips influenced the political atmosphere to the benefit of their national pricing decisions. It is clear that OPEC is a profit maximizing cartel.History) Before OPEC, seven major oil companies (The Seven Sisters) kept the price of oil at a competitive level by limiting production.b) OPEC is formed with five major exporters in September 1960c) From 1960 to early 1970 the price declaimed, due to increased competition from independent oil companies. d) From 1970 to 1973 the exporting countries increased their control over supply (with agreements and nationalizing production). Oil prices reach the same level as refineries.e) Six Persian OPEC members increased the amount charged to refineries, in addition to oil production cuts, in October 1973f) In 1974 the real price tripled compared to the previous year.g) From 1979 through 1980 the price increased substantially to more than five times the 1973 price.h) In 1986 the price of gasoline was 10% higher than the 1964 level.i) Before of the Bush administration, gasoline prices remained relatively constant until the end of the 1990s, around 50 dollars a barrel.j) Gasoline reached a dramatic increase. After the Bush administration took power, it has increased by 120%, from 50 to 60 dollars on average per barrel. of Energy, Monthly Energy Review) are converted into real prices using the implicit price deflator. The nature of OPEC can be summarized in four major theories:1. OPEC is a profit-maximizing cartel. The cartel agreement may be suspended from time to time, but OPEC is able to re-establish the cartel.