Question

A large share of the world supply of oil comes from Russia and Saudi Arabia. Suppose the marginal cost of extracting oil is constant at $30 per barrel of oil, and the world demand for oil is described by the following schedule

Q.

a. The equilibrium price will be determined by the intersection of supply and demand curves.
b. The marginal cost of extracting oil influences the quantity supplied.
c. The demand for oil is perfectly elastic.
d. The quantity supplied will exceed the quantity demanded.

Answer 1

The equilibrium price of oil is determined by the intersection of supply and demand curves, the quantity supplied is influenced by the marginal cost of extracting oil, and the quantity supplied can exceed the quantity demanded.

Step-by-step explanation:

The subject of this question is Economics. The question is asking about the factors that determine the equilibrium price and quantity of oil in the world market. The answer is that the equilibrium price will be determined by the intersection of the supply and demand curves, the quantity supplied will be influenced by the marginal cost of extracting oil, and the quantity supplied may exceed the quantity demanded depending on the level of supply and demand.