Question

A recent news story reported that OPEC is expected to decrease the supply of oil next summer. Summer is traditionally a time of increased demand for oil because of the many families driving and flying to vacation sites. What would be the combined effect of these two events on the summer market for gasoline?

a. an increase in the price and an unpredictable change in the quantity
b. an unpredictable change in both the price and the quantity
c. an unpredictable change in the price and a decrease in the quantity
d. an increase in the price and the quantity

Answer 1

Option "A" is the correct answer to the following statement.

Step-by-step explanation:

A current news article reported that next year, OPEC is expected to reduce oil supply.

Summer is typically a period of higher demand for oil owing to the many families traveling and going to the holiday sites.

• Then it is a price increase and an unexpected amount shift.

The up-sloping demand curve, where there is little incentive to sell for increased prices, is moved to the right, since more vendors are willing to supply at a lower price, allowing volumes to increase for a particular price.