i am having trouble with this question macroeconmics chapter 5 question 3 ### 3. Effects of Restricted SupplyThe following graph represents the world market for oil. The Organization of Petroleum Exporting Countries (OPEC) produces a large portion of the world's oil. Suppose OPEC representatives get together and agree to limit the global production of oil.Adjust one or both curves to show the effect of the OPEC agreement.#### Graph Explanation:The provided graph illustrates the equilibrium in the world market for oil, where the Supply and Demand curves intersect. Here is what each axis and curve represent:- **Y-Axis (Vertical Axis):** Indicates the PRICE of oil, measured in Dollars per barrel.- **X-Axis (Horizontal Axis):** Indicates the QUANTITY of oil, measured in Millions of barrels per year.- **Supply Curve (Line in Light Orange):** Shows the quantity of oil that producers are willing to sell at different price levels.- **Demand Curve (Line in Light Blue):** Shows the quantity of oil that consumers are willing to buy at different price levels.- **Equilibrium Point:** The point where the Supply and Demand curves intersect, indicating the equilibrium price and quantity in the oil market.When OPEC agrees to limit global production of oil, this affects the market supply:1. **Shift in Supply Curve:** The Supply curve will shift to the left, indicating a reduction in the quantity of oil supplied at each price level.2. **New Equilibrium:** With the reduced supply, the equilibrium price of oil will increase, and the equilibrium quantity will decrease.Such market changes demonstrate the impact of restricted supply on oil prices and consumption levels.

OPEC produces a large portion of the world's oil. The decision to limit the production of oil by all…

The following graph represents the world market for oil. The Organization of Petroleum Exporting Countries (OPEC) produces a large portion of the world's oil. Suppose OPEC representatives get together and agree to limit the global production of oil. Adjust one or both curves to show the effect of the OPEC agreement.

The following graph represents the world market for oil. The Organization of Petroleum Exporting Countries (OPEC) produces a large portion of the world's oil. Suppose OPEC representatives get together and agree to limit the global production of oil. Adjust one or both curves to show the effect of the OPEC agreement.

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i am having trouble with this question macroeconmics chapter 5 question 3

### 3. Effects of Restricted Supply

The following graph represents the world market for oil. The Organization of Petroleum Exporting Countries (OPEC) produces a large portion of the world's oil.

Suppose OPEC representatives get together and agree to limit the global production of oil.

Adjust one or both curves to show the effect of the OPEC agreement.

#### Graph Explanation:

The provided graph illustrates the equilibrium in the world market for oil, where the Supply and Demand curves intersect. Here is what each axis and curve represent:

- **Y-Axis (Vertical Axis):** Indicates the PRICE of oil, measured in Dollars per barrel.
- **X-Axis (Horizontal Axis):** Indicates the QUANTITY of oil, measured in Millions of barrels per year.
- **Supply Curve (Line in Light Orange):** Shows the quantity of oil that producers are willing to sell at different price levels.
- **Demand Curve (Line in Light Blue):** Shows the quantity of oil that consumers are willing to buy at different price levels.
- **Equilibrium Point:** The point where the Supply and Demand curves intersect, indicating the equilibrium price and quantity in the oil market.

When OPEC agrees to limit global production of oil, this affects the market supply:

1. **Shift in Supply Curve:** The Supply curve will shift to the left, indicating a reduction in the quantity of oil supplied at each price level.
2. **New Equilibrium:** With the reduced supply, the equilibrium price of oil will increase, and the equilibrium quantity will decrease.

Such market changes demonstrate the impact of restricted supply on oil prices and consumption levels.

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