a. Explain the main reasons that caused a fall of the oil price started in 2015.b. Is the elasticity of demand and supply for oil in the short-run elastic or inelastic? Explain why? please make sure the answer is correct 100% and to answer in your words. Understanding the oil market: Supply and Demand effects on priceThe global oil market has been affected in the recent years by many factors that induces theglobal price to fall. This consequence is vital for the budget of the oil dependent countries. Afterthe huge decrease on oil price in 2016, many traders and analysts believe that oil markets arestill not immune to many problems and the oil price will tend to fall again.The main factor and problems toward a fall of the oil price started in 2015 but considering thatpeople and oil companies do not tend to react immediately to the change of oil price, thetotal consumption and production of oil did not get any surprised changes in the short-run.The main factor that caused the drop on the oil price is the OPEC failure. The member countriesof OPEC did not agree to stabilize the oil markets, since the organization decided against cuttingproduction at a 2014 meeting in Vienna.It is estimated that if OPEC does not cut production, the result is a further oversupply of oil,causing a pressure on crude oil prices for the long term.On the other hand, we have faced a slight decline of the demand. The economies of Europeand developing countries are weakening, and at the same time, vehicdes are becoming moreefficient, which has caused the demand for fuel to lag. Moreover, many countries are relying onalternative resources than oil, which has further decreased the oil demand.

The main reason behind the fall in prices of oil is excess supply. when the supply of any commodity…

Answered: Explain the main reasons that caused a…

Business

Economics

Explain the main reasons that caused a fall of the oil price started in 2015.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter4: Labor And Financial Markets

Section: Chapter Questions

Problem 30P: Predict how each of the following economic changes will affect the equilibrium price and quantity in...

See similar textbooks

Similar questions

Predict how each of the following economic changes will affect the equilibrium price and quantity in the financial market for home loans. Sketch a demand and supply diagram to support your answers. The number of people at the most common ages for home-buying increases. People gain confidence that the economy is growing and that their jobs are secure. Banks that have made home loans find that a larger number of people than they expected are not repaying these loans. Because of a threat of a war, people become uncertain about their economic future. The overall level of saving, in the economy diminishes. The federal government changes its bank regulations in a way that makes it cheaper and easier for banks to make home loans.
Predict how each of the following events will raise or lower the equilibrium wage and quantity of oil worker in Texas. In each case, sketch a demand and supply diagram to illustrate your answer. The price of oil rises. New all-drilling equipment is invented that is cheap and requires few workers to run. Several major companies that do not drill oil open factories in Texas, offering many well-paid jobs outside the oil industry. Government imposes costly new regulations to make oil-drilling a safer job.
Identify the most accurate statement. A price floor will have live largest effect if it is set: substantially above the equilibrium price slightly above the equilibrium price slightly below the equilibrium price substantially below the equilibrium price
Assume that the supply of law-skilled worker is fairly elastic, but the employers demand for such workers is fairly inelastic. If the policy goal is to expand employment for low-skilled workers, is it better to focus on policy tools to shift the supply of unskilled labor or on tools to shift the demand for unskilled labor? What if the policy goal is to raise wages for this group? Explain your answer with supply and demand diagrams.
The price of crude oil increased to its highest level due to conditions which impactedsupply. Historically, crude oil has traded at between 70 and 150 USD per barrel. But theprice increased to over 200 USD in March 2022. Growing demand in Canada for crude tobe turned into refined petroleum, coupled with a sharp fall in production in Saudi Arabiahave both been factors in the price increase. Bauxite production in Saudi Arabia for 2017-18 fell 65% year-on-year due to an agreement with OPEC. The Energy InformationAdministration predicts that global consumption of crude oil is likely to be greater thanproduction by 20 million barrels this year.In the US, companies in the steel and alumina industry have put pressure on the USgovernment to relax import controls, warning that otherwise they might run out of petrol.Commentators predict that most steel and alumina producers will be unaffected becausecrude is such a small part of their spending.a. Explain, using supply and demand analysis, why…
Need solution!! ASAP PLEASE TYSM 1. Given the hypothetical demand of product (y) in a known market are Demand (D1) = 500, 400, 100, 200, and 300. Construct the demand curve and shift in the demand curve if prices in peso will start from 100php with an interval of 100php each. 2. Where is the shift if Demand (D2) will increase to 100? Show it graphically. 3. How will you explain the graph? 4. Use pen and graphing paper or Microsoft Excel to plot. 5. Please consider the law of demand in crafting the demand schedule.
suppose the price of orange juice rises and the apples falls. what would you expect ti happen to the price and quantity of apple juice? why would the equilibrum quanity increase while the impact onbthe equilbrum price be uncertain?
8. For each question below, draw supply and demand curves for the corn market.Show in which direction (if any) the demand and/or supply curve is likely to shift in response tothe shock described. Clearly state or show the effect on the equilibrium price and quantity forbread.a. The government passes a bill subsidizing corn production for ethanol.b. Income in the United States and worldwide decreases.C. If both the above effects happen at the same time, what do we know aboutthe effect on equilibrium price and quantity?d.In game theory, what is a Nash equilibrium?
For each “Market Change” there is a Demand column and a Supply Column. In each of those two columns, you shouldwrite one of these three things: Increase, Decrease, or Neither. (Every market change will have at least one “Neither”.) #5 Market Change Demand Supply #6 Market Change Demand SupplyMinimum wage rises. Recently, the price of pools rose instores.Why? Why?#7 Market Change Demand Supply #8 Market Change Demand SupplyOver the past few years,there have been increasedtariffs on goods madeoverseas. How have theseaffected steel markets?(HINT: A tariff is sometimescalled another name.)You start a coffee shop in theStudent Center at CTC. You noticethat you sell about the sameamount of coffee and muffins.Based on this, you decide toincrease the price of muffins. Howwould this affect coffee?Why? Why?#9 Market Change Demand Supply #10 Market Change Demand SupplyIn May, not long after manyreceived a fiscal stimuluscheck, the Nintendo Switchwas difficult to find in stores.Teleconferencing…
29. After lockdowns were declared globally in 2020, the price of oil crashed from $64per barrel in January to $18 per barrel in April. What is the most likely reason thatlockdowns contributed to the oil price crash?(A) Supply increased due to oil companies reallocating resources to help with theCOVID-19 pandemic.(B) Supply decreased due to oil workers being furloughed.(C) Demand increased from factories producing Personal Protective Equipment foressential workers.(D) Demand decreased since fewer people were commuting to work.
Discuss clearly how the following items may affects the change in demand. Population change Prices of related goods Expected future prices, income, and credit
Question 1: QUESTION d Read the scenario and determine if it wil change the supply or the demand of the market listed. Will equilibrium price increaseor decrease ? Will equilibrium quantit increase or decrease? Market: Sugar produced in the United State Scenario: Tarifts on imported sugar lead U.S, sugar to buy more from U.S, sugar producers. Supply or demand? Equilibrium price? Equillbrium quanity? Market: Chunky Monkey Icecream Scenario: Social Media Influencer Addison Rae advertises Kemps vanilla frozen yogurt to her 100 million followers. Supply or demand? Equilibrium Price? Equilibrium Quanity? Market: New computer Scenario: U.S treasury announces new stimulus check that would be sent to all households. Supply or demand? Equillibrium Price? Equillibrium Quantiy? Market: Trucking Service Scenario: OPEC announces a massive oil production increase driving down the cost of gas Supply or demand? Equilibrium Price? Equilibrium Quantity?