Oil and Natural Gas can each be used as a source of energy and are,for many purposes interchangeable.Which of the following best explains the increase in the price of natural gas that accompanied the increase in the price of oil during the 1990-1991 Persian Gulf War?
A) Increased oil prices raised demand for natural gas,a substitute good.
B) Increased oil prices raised the quantity demanded of natural gas by movement along the natural gas demand curve.
C) Increased oil prices reduced supply of natural gas,a substitute good.
D) Increased oil prices reduced supply of natural gas,an alternate good.
E) Increased oil prices raised supply of natural gas,a substitute good.

Question

Quizplus · Accepted Answer

When the price of oil increased, consumers turned to natural gas as a substitute, increasing its demand and thus its price.

Oil and Natural Gas Can Each Be Used as a Source