Chapter 3: The Market at Work: Supply and Demand Page 88 3.3. What determines su

Question

Chapter 3: The Market at Work: Supply and Demand Page 88 3.3. What determines supply? Consider the market for gasoline. Suppose that a new oil-pump technology is developed, making gasoline production less costly. At the same time, war breaks out and several oil fields are destroyed. What will be the effect on supply? Supply will increase due to the nevw technology, but decrease due to war. The overall effect is unknown. Both the new technology and the war will cause supply to increase. Both the new technology and the war will cause supply to decrease. Supply will decrease due to the nevw technology, but increase due to war. The overall effect is unknown, MacBook Air

Explanation / Answer

ANSWER:

Supply will increase due to the new oil technology, but decrease due to war as the oil fields are destroyed and since we don't know what has more effect , the technology or the war , the overall effect is unknown.

hence option a.

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