Johari: Govt to consider ceiling for oil priceKUALA LUMPUR: The setting of a ceiling is one of the options the government isconsidering to tackle the issue of escalating oil price. Second Finance Minister Datuk SeriJohari Abdul Ghani said in certain advanced countries, the governments would leave oilprices afloat, and the oil and gas (O&G) industry players would determine them. "It is up tothe government to set a ceiling which is deemed fair for all."When we (the government) have decided on the ceiling price, whether they (O&G industryplayers) want to sell the oil at lower prices for promotional purposes, we leave it to them.This is one of the options we are looking at," he said. He said the government has also tobe mindful whether the policy would be a problem for those living outside the city. "We areafraid the industry players would pay more attention in obtaining revenue from consumersin the city, and don't want to do the same for those in the outskirts. We have to be wary ofthis too," he said. On the reintroduction of fuel subsidies, Johari said, it would not be goodfor the Malaysian economy and were not sustainable."We are aware of the oil prices. We will monitor them. If they keep on increasing and ifthere is additional revenue, I think the government can consider a different form ofassistance to the lower groups, but not those who are well-off," he said. He said thegovernment would come out with a mechanism. "However, as of now there isn't a formulayet, but the government has already decided that it can't reverse this (subsidy) policy.".Adapted from New Straits Times, Thursday Feb 9th, 2017.Using an appropriate diagram, explain the impact of the imposition of ceiling price onoil prices towards the market equilibrium.

Market demand is the summation of demand made by all the individuals in the market. The factors that…

Answered: Using an appropriate diagram, explain…

Using an appropriate diagram, explain the impact of the imposition of ceiling price on oil prices towards the market equilibrium.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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