The price of crude oil increased to $100 per barrel in early 2008. What would we expect to see happen to the supply of gasoline, which is produced using crude oil?
A) The supply of gasoline will increase.
B) The supply of gasoline will decrease.
C) The supply of gasoline will stay the same because the government requires gasoline producers to meet statutory minimum production levels.
D) The supply of gasoline will stay the same because of the profit motives of gasoline producers.
B
You might also like to view...
When the central bank pursues contractionary monetary policy, we that this policy will result in an increase in the interest rate, a reduction in investment, a reduction in demand, and a lower level of equilibrium output. Explain what happens to the position of the IS curve as the central bank pursues contractionary monetary policy
What will be an ideal response?
An increase in total revenue will result if
A) demand is inelastic and price decreases. B) demand is elastic and price decreases. C) demand is elastic and price increases. D) demand is unitary elastic and price increases.