Assume There Is a Reduction in the Shipments of Petroleum

question 17

Multiple Choice

Assume there is a reduction in the shipments of petroleum products due to political tension in the Persian Gulf.Which of the following would not be expected to happen?

• A)Oil companies would "ration" their supplies of gasoline by raising price.
• B)There would be a shortage of the original equilibrium price.
• C)Quantity demanded would decrease.
• D)The demand curve would shift to the left.

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Definitions:

Monopolistic Competition

A market structure characterized by many sellers offering products that are similar but not identical, allowing for some degree of market power.

Four-Firm Concentration

is a metric that measures the total market share held by the four largest firms within an industry, indicating the level of market concentration and competition.

Barriers to Entry

Obstacles that make it difficult for new competitors to enter a market.

Oligopoly

A market structure characterized by a small number of firms whose decisions about production and pricing significantly affect the market.