What benefits do OPEC countries obtain by cutting oil supply?

Question

It is unclear to a economic novice like me why OPEC is not cutting down production and raising oil prices. I have read several journalists commenting upon this on the internet but perhaps an economist can explain this current fact better.

Answer 1

OPEC's Share of the gloabl oil market has been declining over time The residual demand curve it faces is now more elastic. As such. recducing output will not have a large impact on prices an d will result in lower over all revenue. With elastic demand, The percent change in price is small relative to the percent change in quantity.