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The price of crude oil increases 50%. This will cause a change in ( supply/ quality supplied )

✓ for crude oil. Why?

1 Answer

3 votes

Answer:

See below

Step-by-step explanation:

A price increase motivates suppliers to avail more products for sale in the markets. High prices tend to have a high margin hence more profits. Like other businesses, oil producers are profit-motivated; they will supply more quantities if there is a high probability of making more profits.

The law of supply explains the correlation between supply and price. As prices increase, supply also tends to increase.

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