Suppose That the Following Table Shows the Supply and Demand

question 139

Multiple Choice

Suppose that the following table shows the supply and demand schedules for Arabian light crude oil on the free market: $$\begin{array} { | c | c | c | } \hline \begin{array} { c } \text { Price } \\\text { (Dalars/barrel) }\end{array} & \begin{array} { c } \text { Quantity demanded (mil. } \\\text { barrels per day) }\end{array} & \begin{array} { c } \text { Quantity Supplied (mil. } \\\text { barrels per day) }\end{array} \\\hline 26 & 14 & 10 \\\hline 27 & 13 & 11 \\\hline 28 & 12 & 12 \\\hline 29 & 11 & 13 \\\hline 30 & 10 & 14 \\\hline\end{array}$$ Given the information in the table, the only price at which there is neither shortage nor surplus is:

• A) $26 per barrel.
• B) $27 per barrel.
• C) $28 per barrel.
• D) $29 per barrel.

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Definitions:

Sherman Act

is a foundational antitrust law in the United States aimed at preserving competition by prohibiting monopolies, cartels, and other forms of anticompetitive practices.

Restraint Of Trade

Legal doctrine that restricts the ability for parties to freely conduct business, often related to antitrust issues and competition law.

Tying Contract

A sales agreement that requires the buyer to purchase another product or service, distinct from the product or service of interest.

Federal Trade Commission Act

A United States law established in 1914 to promote consumer protection and eliminate and prevent anticompetitive business practices.