Exhibit 3-5 -Refer to Exhibit 3-5 for the Demand and Supply Model

question 117

Essay

Exhibit 3-5
$\begin{array}{|c|c|c}\hline \begin{array}{c}\text { Price per } \\\text { Barrel }\end{array} & \begin{array}{c}\text { Quantity } \\\text { Demanded }\end{array} & \begin{array}{c}\text { Quantity } \\\text { Supplied }\end{array} \\\hline \$ 50 & 725 & 900 \\\hline \$ 49 & 745 & 885 \\\hline \$ 48 & 775 & 840 \\\hline \$ 47 & 800 & 800 \\\hline \$ 46 & 830 & 750 \\\hline\end{array}$

-Refer to Exhibit 3-5 for the demand and supply model of the world oil market (in millions of barrels per day).
(A) I5 there a shartage or suplus of al at a price of $48.]D per barrel? Why? What is the quantity of shortege ar suplus?
(B) Is there a shortage ar swplus of ail at a price af 46 per barel? Why? What is the quantity of shartage or suplus?
(C) What is the equilibrium price and quantity in this market?

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Definitions:

Retained Earnings

The portion of net income that is not distributed as dividends to shareholders, but retained by the company for reinvestment.

Notes Payable

Short-term or long-term liabilities representing amounts the company owes because it has issued promissory notes.

Accounts Receivable

Receivables by a corporation from its clients for goods or services that have been extended or utilized, yet the corresponding payments are awaited.

Common-base Year Statement

Financial statements that are adjusted to a single point in time or base year, facilitating comparison across different time periods.