The Wall Street Journal reported the following news:"Higher prices for natural gas and coal are forcing power-generation companies and manufacturers to consider switching to oil. The International Energy Agency (IEA) increased its demand forecast for oil in 2021 and 2022 by 170,000 and 210,000 barrels per day but the cumulative effect of the crisis could be as much as 500,000 barrels daily from September through the first quarter of 2022." How are higher natural gas and coal prices likely to affect oil prices? (Draw a set of supply and demand curves to help you answer thequestion.)O The demand curve for oil will shift down and to the left and the price of oil will fall.The supply curve for oil will shift down and to the right and the price of oil will fall.O The demand curve for oil will shift up and to the right and the price of oil will rise.O The supply curve for oil will shift up and to the left and the price of oil will fal.

Demand and supply forces in the market interact to give the equilibrium level of price and output.…

Answered: How are higher natural gas and coal…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The Wall Street Journal reported the following news:

"Higher prices for natural gas and coal are forcing power-generation companies and manufacturers to consider switching to oil. The International Energy Agency (IEA) increased its demand forecast for oil in 2021 and 2022 by 170,000 and 210,000 barrels per day but the cumulative effect of the crisis could be as much as 500,000 barrels daily from September through the first quarter of 2022."

How are higher natural gas and coal prices likely to affect oil prices? (Draw a set of supply and demand curves to help you answer the
question.)
O The demand curve for oil will shift down and to the left and the price of oil will fall.
The supply curve for oil will shift down and to the right and the price of oil will fall.
O The demand curve for oil will shift up and to the right and the price of oil will rise.
O The supply curve for oil will shift up and to the left and the price of oil will fal.

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