A shortage of OPEC oil at current market prices will increase oil prices because of:
A)the law of elastic supply.
B)the law of elastic demand.
C)consumers will bid up the price of oil.
D)all of the above.
E)none of the above.

Question

Quizplus · Accepted Answer

If there is a shortage of OPEC oil at current market prices, then the demand for oil will exceed the supply, causing consumers to bid up the price of oil. This is because oil is an essential commodity and consumers will be willing to pay a higher price to ensure their supply. The law of elastic supply and demand may also play a role, but ultimately it is the shortage causing consumer bidding that drives up prices.

A Shortage of OPEC Oil at Current Market Prices Will