This is an economic question, After several years of slow economic growth, world

Question

This is an economic question, After several years of slow economic growth, world demand for petroleum began to rise rapidly in the 1990s. Much of the increase in demand was met by additional supplies from sources outside the Organization of Petroleum Exporting Countries (OPEC). OPEC, during this time, was unable to restrain output among members in its effort to lift oil prices. What best describes these events?

A.     The rise in demand shifted the demand for oil to the right. OPEC actions shifted the demand for oil back to the left.

B.     The rise in demand shifted the demand for oil to the right. As price rose, the supply of oil also rose.

C.     The rise in demand shifted the demand for oil to the right. As price rose, the quantity of oil supplied rose.

D.     The rise in demand reflects a movement down along the demand curve as supply shifted to the right when suppliers produced more oil.

Explanation / Answer

D.     The rise in demand reflects a movement down along the demand curve as supply shifted to the right when suppliers produced more oil.

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