If a war broke out between Saudi Arabia and Iran that resulted in the disruption of...
If a war broke out between Saudi Arabia and Iran that resulted in the disruption of 40% of the worlds oil refineries, what would the effect be on the world oil market?
a. The demand curve would increase, increasing the market price of oil
b. The supply curve would decrease, lowering the price of oil
c. The supply curve would increase, raising the market price of oil
d. The supply of oil would decrease, increasing the market price of oil
Homework Answers
Answer
Option d
d. The supply of oil would decrease, increasing the market price of oil
the 40% supply of the world decreases. It shifts the supply curve to left. It increases the price and decreases quantity in the world market.
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