The development of a low-cost synthetic fuel is expected to affect the market for crude oil in which of the following ways?

Question

Quizplus · Accepted Answer

The development of a low-cost synthetic fuel would decrease the demand for crude oil as consumers switch to the cheaper alternative, leading to a decrease in the price of oil. This decrease in demand and price would result in a decrease in both the quantity demanded and supplied of oil, ultimately decreasing the equilibrium quantity of oil in the market.

The Development of a Low-Cost Synthetic Fuel Is Expected to Affect