incentive assignment before question completed: 82 of 116 my score: 78.67/116 pts (67.82%) other things…

incentive assignment before question completed: 82 of 116 my score: 78.67/116 pts (67.82%) other things remaining equal, a decrease in the world oil supply like those that occurred in 1973 - 74 and 1979 would a. increase the price of airline travel and increase its equilibrium quantity. b. decrease the price of airline travel and increase its equilibrium quantity. c. increase the price of airline travel and decrease its equilibrium quantity. d. decrease the price of airline travel and decrease its equilibrium quantity.

incentive assignment before question completed: 82 of 116 my score: 78.67/116 pts (67.82%) other things remaining equal, a decrease in the world oil supply like those that occurred in 1973 - 74 and 1979 would a. increase the price of airline travel and increase its equilibrium quantity. b. decrease the price of airline travel and increase its equilibrium quantity. c. increase the price of airline travel and decrease its equilibrium quantity. d. decrease the price of airline travel and decrease its equilibrium quantity.

Answer

Brief Explanations:

Oil is a major input for airlines. A decrease in world oil supply causes an increase in oil prices. Higher oil - input costs for airlines lead to a left - ward shift in the supply curve of airline travel. With demand remaining the same, this results in an increase in the price of airline travel and a decrease in the equilibrium quantity.

Answer:

C. increase the price of airline travel and decrease its equilibrium quantity.