If Scientists Discover a New Form of Energy That Cuts

question 249

Multiple Choice

If scientists discover a new form of energy that cuts the cost of producing electricity to the equivalent of $10 a barrel, what will happen to the market for oil?

• A) The price of oil would rise because of the competition from the new energy source.
• B) The supply of oil would decrease because few suppliers can profitably produce oil at $10 a barrel.
• C) There would be no effect on the market for oil.
• D) Demand for oil would decrease over time since no one would pay more than $10 for a barrel of oil to produce energy.

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Definitions:

Price of Mustard

The amount of money required to purchase mustard, a condiment made from the seeds of the mustard plant, which can fluctuate based on factors like production costs and market demand.

Equilibrium Price

The cost at which the amount of a product sought by buyers matches the amount provided by sellers, achieving equilibrium in the market.

Demand for

The desire and willingness of consumers to purchase a specific quantity of goods or services at a given price over a particular period.

Mustard Recall

A situation where mustard products are withdrawn from the market due to safety concerns like contamination or mislabeling.