The cost of natural gas sky rocketed following the Russian invasion of Ukraine. In response, governments in Europe considered implementing a price cap on natural gas. Suppose the market rate for natural gas is $1 per kWh (kilowatt hour, a measure of power), and the government proposes a price cap of $0.75 per kWh. Which of the following statements are true? (Select all that apply.) Question 3Answer a. The price cap would make natural gas more expensive. b. Due to the low price of gas, producers are less likely to invest in gas production. c. The government could alleviate the issue through a subsidy instead. d. There will be a shortage of natural gas. e. The government could alleviate the issues by taxing gas producers. f. As a result of the price cap, we would expect to see new natural gas wells being developed. g. There will be an excess supply of natural gas. h. The price cap will have no effect on the market.
The cost of natural gas sky rocketed following the Russian invasion of Ukraine. In response, governments in Europe considered implementing a
Which of the following statements are true? (Select all that apply.)
Question 3Answer
The price cap would make natural gas more expensive.
Due to the low price of gas, producers are less likely to invest in gas production.
The government could alleviate the issue through a subsidy instead.
There will be a shortage of natural gas.
The government could alleviate the issues by taxing gas producers.
As a result of the price cap, we would expect to see new natural gas wells being developed.
There will be an
The price cap will have no effect on the market.
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