What is your advice to return to the equilibrium situation

Reference no: EM131107539

Suppose that you have been hired as an economic consultant by OPEC and given the following schedule showing the world demand and supply for oil.

Price ($/barrel)	Quantity Demanded (millions of barrels/day)	Quantity Supplied (millions of barrels/day)
10	60	20
20	50	30
30	40	40
40	30	50
50	20	60

Your advice is needed on the following questions (use the diagram):

1- What is the price, quantity of supply and quantity of demand in equilibrium situation?

2- If the price raises from $20 to $30 a barrel, will the total revenue from oil sales increase or decrease?

3- What are the values of the price elasticity of booth demand and supply for price changes from $20 to $30 a barrel?

4- If the price of oil degrease from equilibrium price $30 to new price $20 then:

- What do we call the gap between the quantity demanded and quantity supplied?

- What is its value?

- What is your advice to return to the equilibrium situation?

Reference no: EM131107539

Questions Cloud

Calculate the standard deviation of returns : What is the expected return on a portfolio that is equally invested in the two assets? If a portfolio of the two assets has a beta of .5, what are the portfolio weights? Calculate the standard deviation of returns.

What is an accountable care organization : What is an accountable care organization (ACO)? What makes Oregon unique in its approach to Coordinated Care Organization? Why are states experimenting with different models of integrated care?

A developer of radiology equipment : Triple Z Inc., a developer of radiology equipment, has stock outstanding as follows: 12,000 shares of cumulative preferred 2% stock, $150 par and 50,000 shares of $10 par common. During its first four years of operations, the following amounts wer..

Prepare plan to terminate health insurance coverage : Your employer has asked you to prepare a plan to terminate the health insurance coverage your company provides and move employees to purchase health through the state or federal health insurance exchange (healthcare.gov). Discuss the advantages and d..

What is your advice to return to the equilibrium situation : What is your advice to return to the equilibrium situation?

Insurance policy lapse : Assume that Fred cannot afford to pay the premium and lets his auto insurance policy lapse. At the time of the accident, he is uninsured. If the liability judgment against Mary is $100,000, how much, if any, will Mary's insurer pay? Explain your a..

Effects on public revenues and expenditures-public health : In recent years the States of Colorado and Washington have (for all practical purposes) legalized the recreational use of marijuana. Both advocates and opponents claimed that such laws would have observable effects on public revenues and expenditures..

Designing and managing integrated marketing channels : Designing and Managing Integrated Marketing Channels-Some Changing Perspectives. Disintermediation and eMarketing-fact or fiction

Solve for the value of short-run output and inflation rate : Consider an inflation shock example where the o ¯ term jumps (positively). Given parameter values o ¯ = 9% (the exogenous price shock), a ¯ = 0, b = .6, m ¯ = 1, v ¯ = .4, and π ¯ = 3%, solve for the value of short-run output and the inflation rate f..

User Account

All Pages