A Level Economics (9708)•9708/13/M/J/18
Explanation
Oil Market Supply Shift (2013-2015)
Steps:
- Recall 2013-2015 oil market: High prices in 2013 due to tight supply; by 2015, shale boom and OPEC decisions increased global supply.
- Identify economic shift: Rightward supply curve shift, as production rose without matching demand growth.
- Analyze impacts: Lower equilibrium price, higher quantity traded.
- Match to diagrams: Select graph showing supply increase, not demand changes or other shifts.
Why B is correct:
- B depicts a rightward supply shift, aligning with supply-demand law where excess supply lowers price (from ~50 in 2015).
Why the others are wrong:
- A: Shows demand decrease, but global demand grew steadily.
- C: Indicates leftward supply shift, contradicting production surge.
- D: Reflects demand increase, which would raise prices, opposite of observed drop.
Final answer: B
Topic: The interaction of demand and supply
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