In 1982, OPEC's actions were intended to support prices by reducing which of the following?

In 1982, OPEC's actions were intended to support prices by reducing which of the following?

• A. Demand
• B. Production
• C. Refining capacity
• D. Member nations

Answer: (B)

OPEC’s influence on prices comes from controlling how much crude oil reaches the market. In 1982, weak demand and an oversupplied market led the group to aim higher prices by cutting output among its members. Lower production reduces supply, which tends to push prices up if demand doesn’t fall as quickly. Trying to cut demand isn’t something OPEC can directly do, and limiting refining capacity or changing the number of member nations aren’t the mechanisms used to manage price in this context. So the intended move was to reduce production.

OPEC’s influence on prices comes from controlling how much crude oil reaches the market. In 1982, weak demand and an oversupplied market led the group to aim higher prices by cutting output among its members. Lower production reduces supply, which tends to push prices up if demand doesn’t fall as quickly. Trying to cut demand isn’t something OPEC can directly do, and limiting refining capacity or changing the number of member nations aren’t the mechanisms used to manage price in this context. So the intended move was to reduce production.