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Exhibit 3-5 -Refer to Exhibit 3-5

question 146

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Exhibit 3-5
 Price per  Barrel  Quantity  Demanded  Quantity  Supplied $50725900$49745885$48775840$47800800$46830750\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. Suppose that a war in the Middle East causes the quantity supplied of oil to fall by 140 million barrels per day at every price.
(A) Chart the new supply schedule.
(B) What is the new equilibriun price and new equilibriun quentity?
(C) Given this shift in supply, is there a shortege or suplus at the old equilibriun price? Exglanin the mechanism that adyusts the market to the mew equilibrium.


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