As a result of increased tensions in the Middle East, oil production is down by 1.21 million barrels per day – a 5 percent reduction in the world's supply of crude oil. Explain the likely impact of this event on the market for gasoline and the market for small cars. The gasoline market will have: higher equilibrium prices and lower equilibrium quantity. higher equilibrium prices and higher equilibrium quantity. lower equilibrium prices and higher equilibrium quantity. lower equilibrium prices and lower equilibrium quantity. The small car market will have:
As a result of increased tensions in the Middle East, oil production is down by 1.21 million barrels per day – a 5 percent reduction in the world's supply of crude oil. Explain the likely impact of this event on the market for gasoline and the market for small cars. The gasoline market will have: higher equilibrium prices and lower equilibrium quantity. higher equilibrium prices and higher equilibrium quantity. lower equilibrium prices and higher equilibrium quantity. lower equilibrium prices and lower equilibrium quantity. The small car market will have:
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter8: Understanding Markets And Industry Changes
Section: Chapter Questions
Problem 2MC
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Question
As a result of increased tensions in the Middle East, oil production is down by 1.21 million barrels per day – a 5 percent reduction in the world's supply of crude oil. Explain the likely impact of this event on the market for gasoline and the market for small cars.
The gasoline market will have:
-
higher
equilibrium prices and lowerequilibrium quantity . -
higher equilibrium prices and higher equilibrium quantity.
-
lower equilibrium prices and higher equilibrium quantity.
-
lower equilibrium prices and lower equilibrium quantity.
The small car market will have:
-
higher equilibrium prices and lower equilibrium quantity.
-
higher equilibrium prices and higher equilibrium quantity.
-
lower equilibrium prices and lower equilibrium quantity.
-
lower equilibrium prices and higher equilibrium quantity.
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