If scientists discover a new form of energy that cuts the cost of producing electricity to...
If scientists discover a new form of energy that cuts the cost of producing electricity to the equivalent of $10 a barrel, what will happen to the market for oil? The price of oil would rise because of the competition from the new energy source. The supply of oil would decrease because few suppliers can profitably produce oil at $10 a barrel. There would be no effect on the market for oil. Demand for oil would decrease over time since no one would pay more than $10 for a barrel of oil to produce energy.
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Ans. Demand for oil would decrease over time since no one would pay more than $10 for a barrel of oil to produce energy.
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If scientists discover a new form of energy that cuts the cost
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End of Chapter 4.10 Question Help In early 2017, an article in the Financial Times about the oil market quoted the chief economist of oil company BP as saying: "Pricing pressure is likely to come from the supply side, because of strong growth in US shale oil (crude oil found within shale formations), and the demand side as the rise of renewable energy, including electric vehicles, gradually slows growth in oil consumption." After reading this article, a student argues: "From...
its
fundamentals to economics
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