If an inexpensive alternative to oil were found,the price of oil adjusted for inflation
A)would decline as the alternative would reduce the demand for oil.
B)would decline as the alternative would reduce the supply of oil.
C)would increase as the alternative would increase the demand for oil.
D)would increase as the alternative would increase the supply of oil.

Question

Quizplus · Accepted Answer

If an inexpensive alternative to oil were found, the demand for oil would decrease as people would switch to the cheaper alternative. This would result in a decrease in the price of oil adjusted for inflation. As the demand for oil decreases, oil producers would have to reduce their prices to compete with the alternative, leading to a decline in the price of oil.

If an Inexpensive Alternative to Oil Were Found,the Price of Oil