Asked by Iliana Napoles on Jul 17, 2024
Verified
As the key component in gasoline production,an increase in the price of crude oil would cause
A) the demand for gasoline will decrease.
B) the demand for gasoline will increase.
C) the supply of gasoline will increase,and its price will decrease.
D) the supply of gasoline will decrease,and its price will increase.
Crude Oil
A naturally occurring, unrefined petroleum product composed of hydrocarbon deposits and other organic materials.
Gasoline Production
The process of refining crude oil and blending various components to create gasoline, a major fuel used in internal combustion engines.
- Acknowledge the significance of the costs of inputs on the provision of products.
- Comprehend the relationship between the prices of related goods and demand or supply.
Verified Answer
PM
Pham Minh Anh (K13_HN)Jul 21, 2024
Final Answer :
D
Explanation :
An increase in the price of crude oil, as the key component in gasoline production, will lead to a decrease in the supply of gasoline. This is because higher input costs for production will make it less profitable for refineries to produce as much gasoline. Therefore, the limited supply of gasoline will result in a higher price for consumers.
Learning Objectives
- Acknowledge the significance of the costs of inputs on the provision of products.
- Comprehend the relationship between the prices of related goods and demand or supply.