-If OPEC cuts oil production to increase their total revenue, we know that
A) the demand for gasoline will decrease.
B) the price of gasoline will fall.
C) the demand for oil in the global market is inelastic.
D) OPEC faces a horizontal demand for oil curve.

Question

-If OPEC cuts oil production to increase their total revenue, we know that
A) the demand for gasoline will decrease. 
B) the price of gasoline will fall. 
C) the demand for oil in the global market is inelastic. 
D) OPEC faces a horizontal demand for oil curve.

Quizplus · Accepted Answer

When OPEC cuts oil production to increase total revenue, it implies that the demand for oil is inelastic. This means that the percentage decrease in quantity demanded is less than the percentage increase in price, leading to an increase in total revenue.

-If OPEC Cuts Oil Production to Increase Their Total Revenue