Multiple Choice

-The above figure shows the market for petrol. When a cyclone destroys a major refinery that refines oil into petrol, the
A) demand curve for petrol does not shift, and the supply curve of petrol shifts from S1 to S2.
B) demand curve for petrol does not shift, and the supply curve of petrol shifts from S2 to S1.
C) demand curve for petrol shifts from D1 to D2 and the supply curve of petrol does not shift.
D) demand curve for petrol shifts from D1 to D2 and the supply curve of petrol shifts from S2 to S1.
Correct Answer:
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