Stricter environmental regulations and increased demand for energy have caused an increase in the demand for relatively clean natural gas. In the last several years, improved extraction technologies and new discoveries have increased the availability of natural gas. What has been the net effect on price and quantity for natural gas?
A) Quantity sold and price both fell with certainty.
B) Quantity sold fell and the effect on price is ambiguous.
C) Quantity sold and price both rose with certainty.
D) Quantity sold rose while the effect on price is ambiguous.

Question

Quizplus · Accepted Answer

The increased demand for natural gas raises the quantity sold, while the increased availability due to improved extraction technologies affects the price. The net effect on price is ambiguous because the increase in supply could lower prices, while the increase in demand could raise prices.

Stricter Environmental Regulations and Increased Demand for Energy Have Caused