11.3 The Final Equilibrium
Refer to the information provided in Figure 11.6 below to answer the questions that follow. Figure 11.6
-Refer to Figure 11.6. Suppose the equilibrium price level is 110. An increase in the supply of oil would probably
A) increase both the equilibrium output and the price level.
B) decrease the equilibrium output and increase the price level.
C) increase the equilibrium output and decrease the price level.
D) decrease both the equilibrium output and the price level.

Question

11.3 The Final Equilibrium
Refer to the information provided in Figure 11.6 below to answer the questions that follow.  Figure 11.6
-Refer to Figure 11.6. Suppose the equilibrium price level is 110. An increase in the supply of oil would probably
A) increase both the equilibrium output and the price level. 
B) decrease the equilibrium output and increase the price level. 
C) increase the equilibrium output and decrease the price level. 
D) decrease both the equilibrium output and the price level.

Quizplus · Accepted Answer

An increase in the supply of oil would likely decrease the cost of production for many goods and services, leading to an increase in supply. This would result in a lower price level due to the increased supply and a higher equilibrium output as more goods and services can be produced and purchased at the lower price.

11.3 the Final Equilibrium