Question

The amount of capital needed to buy or build an oil refinery depends on:

A) The quality of oil
B) The location of the refinery
C) The number of employees
D) The price of crude oil

Answer 1

The amount of capital needed to buy or build an oil refinery depends on factors such as the quality of oil, the location of the refinery, the number of employees, and the price of crude oil.

Step-by-step explanation:

The amount of capital needed to buy or build an oil refinery depends on several factors:

1. The quality of oil: Different types of oil may require different refining processes and equipment, which can impact the capital needed.
2. The location of the refinery: The proximity to oil sources and customers, availability of transportation and utilities, and local government regulations can affect the capital required.
3. The number of employees: A larger refinery with more employees may require a larger capital investment.
4. The price of crude oil: Fluctuations in oil prices can impact the cost of acquiring raw materials for the refinery.

For example, if the price of oil rises, it may increase the cost of acquiring the raw material and thus require a higher capital investment. Similarly, if new oil-drilling equipment is invented that is cheap and requires few workers to run, it may reduce the overall capital needed.