The war in Iraq comes to an end. Iran and Afghanistan lay pipes to generate more oil. The United States and Venezuela enter into an era of friendship. Which of the following correctly captures the effect of this change on the market for gasoline?

A. Both equilibrium quantity and price will increase.
B. Both equilibrium quantity and price will decrease.
C. Equilibrium quantity will decrease, but equilibrium price will increase.
D. Equilibrium quantity will increase, but equilibrium price will decrease.


Answer: D

Economics

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