Final answer:
The decline in sales of hybrid and electric vehicles due to falling gasoline prices in 2015 is an example of business risk. Business risk arises due to market condition changes influencing consumer demand, affecting companies' performance. Additionally, in the financial market, a rise in the supply of loanable funds would typically lead to a decrease in interest rates.
Step-by-step explanation:
As gasoline prices fell in 2015, sales of hybrid and electric vehicles dropped sharply. This is best described as B. business risk. Business risk refers to the potential for a company's operations to lead to a loss or underperformance, often due to changes in market conditions. In this case, the decrease in gasoline prices reduced the demand for alternative fuel vehicles like hybrids and electric cars, as consumers found less economic incentive to pay the premium for such vehicles compared to traditional gasoline-powered cars. Hybrid cars are often more expensive upfront than their gasoline-only counterparts and the cost savings through improved fuel efficiency become less attractive when gasoline prices are low. Therefore, the change in consumer behavior based on fluctuating gasoline prices presents a significant business risk for manufacturers of hybrid and electric vehicles.
Another example regarding the affect on oil prices would be when a major discovery of new oil is made off the coast of Norway. This discovery would likely increase the supply of oil, shifting the supply curve to the right and leading to a lower equilibrium price and higher equilibrium quantity, assuming the demand remains constant.
In the financial market, a change that would lead to a decline in interest rates could be C. a rise in supply of loanable funds. An increase in the supply of loanable funds would generally put downward pressure on interest rates, making borrowing more attractive and potentially stimulating economic activity.