If the Price of Oil Increases Significantly, Buyers and Sellers

question 235

Multiple Choice

If the price of oil increases significantly, buyers and sellers of gasoline will both expect the price of gasoline to also increase. If sellers of gasoline act on their expectations more than the buyers do, then

• A) the equilibrium price of gasoline will increase, while the equilibrium quantity will decrease.
• B) the equilibrium price of gasoline will increase, while the equilibrium quantity will increase.
• C) the equilibrium price of gasoline will decrease, while the equilibrium quantity will decrease.
• D) the equilibrium price of gasoline will decrease, while the equilibrium quantity will increase.

---

Definitions:

Warehouse Methodology

Systematic approaches and practices used in managing the operations, storage, and distribution of goods within a warehouse.

Facilities

The physical buildings, equipment, and resources provided for a specific purpose or activity.

Supply Chain Network

The system of organizations, people, technology, activities, information, and resources involved in moving a product or service from supplier to customer.

Safety Inventory

A stock of goods or materials kept as a buffer to mitigate the risk of stockouts due to uncertainties in supply or demand.