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But this does work in practice - it basically describes OPEC's current strategy, and perhaps relates to Starbucks' ongoing market strategy, etc. The price may

But this does work in practice - it basically describes OPEC's current strategy, and perhaps relates to Starbucks' ongoing market strategy, etc. The price may return to the equilibrium price at some point, but the single seller is able to hold it low for as long as they have reserves to dump. If other sellers are dependent on sales, then they must compete.

refurb 11y ago
it basically describes OPEC's current strategy Not really. OPEC's strategy is one of production. Based on their reserves, OPEC could keep it up for decades. If you're dumping a strategic reserve, it has a limited time span and likely the market can estimate how long since the reserve was public info.
- jameshart 11y ago
  OPEC's strategic reserve is also kept underground - just where they found it.
  - refurb 11y ago
    True, but OPEC's reserves are measured in decades of production, not like the US reserve. Unlike the US reserve, OPEC's strategy is not quite as time constrained.