The following diagram shows the demand for and supply of oil. The supply and demand curves are initially given by S₀and D₀. The market is in equilibrium at point x. There is then a recession accompanied by political tensions in certain oil- producing countries that adversely affects oil production. As a result either or both the demand and supply curves shift to one of the new positions shown in the diagram. What will be the equilibrium position on the diagram?

Question

Quizplus · Accepted Answer

The Answer of The following diagram shows the demand for and supply of oil. The supply and demand curves are initially given by S₀and D₀. The market is in equilibrium at point x. There is then a recession accompanied by political tensions in certain oil- producing countries that adversely affects oil production. As a result either or both the demand and supply curves shift to one of the new positions shown in the diagram. What will be the equilibrium position on the diagram?

The Following Diagram Shows the Demand for and Supply of Oil