In 2010, a British Petroleum oil rig exploded in the Gulf of Mexico. The explosion resulted in a major oil spill and a decrease in the supply of oil. At the same time, the average price of gasoline decreased
Which of the following best explains the decrease in the price of gasoline? A) The quantity demanded of gasoline increased.
B) The demand for gasoline decreased, and the effect of the decrease in demand on the gasoline price was greater than the price effect of the decrease in supply.
C) The demand for gasoline increased, and the effect of the increase in demand on the gasoline price was less than the price effect of the decrease in supply.
D) The demand for gasoline remained unchanged.
B
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Which of the following is true at the equilibrium level of income?
a. Unplanned inventory changes are positive. b. Firms are unable to produce the desired rate of output. c. Autonomous consumption spending is equal to induced consumption spending. d. Aggregate expenditures equal real GDP. e. Unplanned investment spending is positive.
The average variable cost, the average total cost, and the marginal cost start to diminish only after the firm reaches the point of efficient scale
a. True b. False Indicate whether the statement is true or false