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

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Business

Aries

7 August, 14:02

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

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Mario Monroe · Answer 1

Answer:Decrease in supply.

Explanation: Supply is the amount of goods and services which an individual is willing and ready to purchase at a given price. The invention of a new technology which makes gasoline production less costly will lead to a decrease in price. Producers reduces supply when there's a decrease in price and increase supply when there's an increase in price. Also, the destruction of several oil fields means that there would be a reduction in the supply of oil in the economy. Since oil fields have been destroyed, it will have a negative effect on supply.