What happens to the equilibrium price and quantity

Reference no: EM132196850

Question: During the 1973-1974 oil crisis, OPEC reduced the supply of oil in response to the U.S. involvement in the Arab-Israeli war.

a. Illustrate what happens to the equilibrium price and quantity of oil and Cadillacs in the United States. Provide an explanation below the diagram.

b. If you did part (a) correctly, the demand for Cadillacs should have fallen. Oddly enough, the demand for Cadillacs increased in states like Kentucky and West Virginia. Explain why?

Reference no: EM132196850

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