Question

Consider the supply of crude oil on the world market. In August 2011, the price of oil was roughly $80 per barrel. Which of the following changes would increase the supply of oil? The oil supply curve would shift to the right if the prices of other petroleum-based products (substitutes) were to increase. the number of oil-producing countries were to decrease. the cost of transporting oil were to increase. future oil prices were expected to be lower. the world price of oil were to increase.

Answer 1

The answer is: Future oil prices were expected to be lower.

Step-by-step explanation:

If the suppliers of oil believe that oil price will decrease in the future, they will increase the current quantity supplied of oil to take advantage of the current higher prices. The suppliers have a limited time span to benefit from high prices (higher profit margins) before the price starts to lower as well as their profit margins.