If the price of coal, a close substitute for oil, decreases, then the
A)supply curve for oil will shift to the right.
B)demand curve for oil will shift to the right.
C)equilibrium price and quantity of oil will not change.
D)demand curve for oil will shift to the left.
E)supply curve of coal will shift to the left.

Question

Quizplus · Accepted Answer

If the price of coal (a close substitute for oil) decreases, then consumers will likely switch to using more coal instead of oil, causing a decrease in the demand for oil. Therefore, the demand curve for oil will shift to the left.

If the Price of Coal, a Close Substitute for Oil