Examine the following variables that could affect the price of oil: Choose any two of the above variables, and describe how your selections would affect oil prices based on the supply and demand analysis. a. Tax credits were offered for expenditures on home insulation. b. The Alaskan pipeline was completed. c. A supposed ceiling on the price of oil was removed. d. A new, very large deposit of oil was discovered. e. Buyers in large numbers all of the sudden started driving large sport utility vehicles. f. The use of nuclear power suddenly decreased.
Examine the following variables that could affect the price of oil: Choose any two of the above variables, and describe how your selections would affect oil prices based on the
a. Tax credits were offered for expenditures on home insulation.
b. The Alaskan pipeline was completed.
c. A supposed ceiling on the price of oil was removed.
d. A new, very large deposit of oil was discovered.
e. Buyers in large numbers all of the sudden started driving large sport utility vehicles. f. The use of nuclear power suddenly decreased.
A new, very large deposit of oil was discovered.
This will affect the supply of the eoil. As the new large deposit of oil is discovered, oil supply will increase. Supply curve will shft rightward. Equilibrium price of the oil will increase. Equilibrium quantity of oil will increase.
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