-The above figure shows the demand curve for crude oil. Suppose the price is currently $7. A supply shock suddenly raises the price to $9. What happens with the crude oil sales revenue?
A)Crude oil sales revenue stays the same.
B)Crude oil sales revenue slightly increases.
C)Crude oil sales revenue declines.
D)Crude oil sales revenue significantly increases.

Question

-The above figure shows the demand curve for crude oil. Suppose the price is currently $7. A supply shock suddenly raises the price to $9. What happens with the crude oil sales revenue?
A)Crude oil sales revenue stays the same. 
B)Crude oil sales revenue slightly increases. 
C)Crude oil sales revenue declines. 
D)Crude oil sales revenue significantly increases.

Quizplus · Accepted Answer

When the price of crude oil increases from $7 to $9, the quantity demanded typically decreases due to the law of demand. If the demand is elastic, the percentage decrease in quantity demanded will be greater than the percentage increase in price, leading to a decline in total revenue.

-The Above Figure Shows the Demand Curve for Crude Oil