If the Price of Coal, a Close Substitute for Oil

question 123

Multiple Choice

If the price of coal, a close substitute for oil, decreases, then the

• A)supply curve for oil will shift to the right.
• B)demand curve for oil will shift to the right.
• C)equilibrium price and quantity of oil will not change.
• D)demand curve for oil will shift to the left.
• E)supply curve of coal will shift to the left.

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Definitions:

Single-Price Monopolist

A market dominance condition where a monopolist charges the same price for all units of a product sold to every consumer.

Perfectly Price Discriminate

A theoretical pricing strategy where a seller charges the maximum price each individual consumer is willing to pay, capturing all consumer surplus.

Profit Area

A segment of a business or a market where the income earned is more than the expenses incurred, resulting in a financial gain.

Price Per Unit

The cost of a single unit of a product or service.