Which Statement Most Accurately Explains the Upward Trend in the Market

question 225

Multiple Choice

Which statement most accurately explains the upward trend in the market price of oil since around the year 2000?

• A) The supply of oil has increased faster than the demand for oil has increased.
• B) Both the demand for and the supply of oil has decreased.
• C) The demand for oil has increased faster than the supply of oil has increased.
• D) The demand for oil has decreased while the supply of oil has increased.

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Definitions:

Utility Function

A mathematical model that describes how a person ranks choices based on perceived utility, happiness, or satisfaction.

Consumption

The act of using goods and services by households or individuals, leading to the satisfaction of needs and wants.

Price

The price in terms of cash expected, necessary, or donated in exchange for a commodity.

Demand Function

An equation showing the relationship between the quantity of a good consumers want to buy and its price, alongside other factors like income and prices of related goods.