In the 1970s,OPEC increased the price of crude oil significantly.This should have caused

Question

Quizplus · Accepted Answer

When the price of crude oil increases significantly, it leads to an increase in the cost of production for firms that use crude oil as an input, causing the supply curve to shift to the left. This, in turn, leads to higher prices for the final product, such as gasoline. Therefore, option C is the correct choice as it explains that the supply curves of firms using crude oil as an input would shift to the left. Option A is incorrect as an increase in the price of crude oil would lead to a decrease in the demand for gasoline. Option B is incorrect as an increase in the price of crude oil would lead to a decrease in the demand for automobiles with V8 engines. Option D is incorrect as the price of gasoline would increase due to the increase in the price of crude oil. Option E is incorrect as the price of fuel-efficient cars would increase due to an increase in demand.

In the 1970s,OPEC Increased the Price of Crude Oil Significantly