Principles of Microeconomics, 7th Edition

Published by South-Western College
ISBN 10: 128516590X
ISBN 13: 978-1-28516-590-5

Chapter 4 - Part II - The Market Forces of Supply and Demand - Quick Check Multiple Choice - Page 86: 4

Answer

(B) supply, lower. Crude oil is a raw material used for producing Gasoline. Since, there a new, large supply of crude oil, there will a supply larger than the equilibrium demand. The large supply will pressurize the price of the good to go down to attain equilibrium.

Work Step by Step

Crude oil is a raw material used for producing Gasoline. Since, there a new, large supply of crude oil, there will a supply larger than the equilibrium demand. The large supply will pressurize the price of the good to go down to attain equilibrium.
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