Table: Market for Oil Suppose That Oil Is Produced by 10

question 123

Multiple Choice

Table: Market for Oil Suppose that oil is produced by 10 countries, each of which produces 10 million barrels of oil a day (MBD) for a total 100 MBD. The world price of oil at this quantity is $36 per barrel so each country earns $360 million a day. Reference: Ref 15-2 (Table: Market for Oil) Refer to the table. Suppose that these countries form a cartel and they each cut back production to 8 MBD. Each country's revenue would:

• A) increase by $72 million a day.
• B) increase by $40 million a day.
• C) decrease by $72 million a day.
• D) decrease by $40 million a day.

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