A-LevelEconomicsThe price system and the microeconomy9708/12 · Oct/Nov 2010 · Q121 Mark
Rising demand for oil from China and other countries is leading to concerns that there may be a world shortage of oil. How should a change in the price of oil prevent such a shortage developing?
APrice should fall to reduce demand and encourage a search for more oil.
BPrice should fall to reduce supply and encourage a reduction in fuel use.
CPrice should rise to reduce demand and encourage a search for alternative fuels.
DPrice should rise to reduce supply and encourage a switch to alternative fuels.
✓ Correct answer
C: Price should rise to reduce demand and encourage a search for alternative fuels.
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