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The oil company 'Standard Oil' delivers Q amount of oil to the market. They developed a new technology which helps them drill oil at a cheaper cost. As a result, 'Standard Oil' would be willing to ________
- a)supply more oil at a given price
- b)supply the same amount of oil at a lower price
- c)supply less oil at a given price
- d)both (a) and (b)
Correct answer is option 'D'. Can you explain this answer?
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Verified Answer
The oil company 'Standard Oil' delivers Q amount of oil to the...
If the costs of production go down, the supply curve shifts to the right as the willingness to sell would be greater at any given price. Hence, 'Standard Oil' would supply more oil at a given price and the same amount of oil at a lower price.
Most Upvoted Answer
The oil company 'Standard Oil' delivers Q amount of oil to the...
Explanation:
Standard Oil, an oil company, has developed a new technology that allows them to drill oil at a cheaper cost. This new technology has significant implications for their supply decisions in the market. Let's analyze each option to understand why the correct answer is option 'D' - both (a) and (b).
Option a) Supply more oil at a given price:
With the new technology, Standard Oil can produce oil at a lower cost. This means that they can now afford to produce and supply more oil while maintaining the same price. By increasing their supply, they can meet the growing demand in the market and potentially increase their market share. This option aligns with the concept of economies of scale, where companies can produce more at a lower cost per unit.
Option b) Supply the same amount of oil at a lower price:
Alternatively, Standard Oil could choose to maintain their current level of supply but offer the oil at a lower price. Since the cost of production has decreased due to the new technology, they can afford to reduce their selling price while still making a profit. Lowering the price could attract more customers, increase market demand, and potentially allow Standard Oil to gain a competitive advantage over other oil companies.
Option c) Supply less oil at a given price:
Given the cost-saving benefits of the new technology, it is unlikely that Standard Oil would choose to supply less oil at a given price. The whole purpose of developing the new technology was to reduce costs and increase efficiency, which would allow them to either supply more oil or offer it at a lower price. This option contradicts the logic behind the technological advancement.
Conclusion:
Based on the analysis, it is clear that Standard Oil would be willing to both increase their supply at a given price and decrease their price while maintaining the same supply. This demonstrates how technological advancements can positively impact a company's supply decisions in the market.
Standard Oil, an oil company, has developed a new technology that allows them to drill oil at a cheaper cost. This new technology has significant implications for their supply decisions in the market. Let's analyze each option to understand why the correct answer is option 'D' - both (a) and (b).
Option a) Supply more oil at a given price:
With the new technology, Standard Oil can produce oil at a lower cost. This means that they can now afford to produce and supply more oil while maintaining the same price. By increasing their supply, they can meet the growing demand in the market and potentially increase their market share. This option aligns with the concept of economies of scale, where companies can produce more at a lower cost per unit.
Option b) Supply the same amount of oil at a lower price:
Alternatively, Standard Oil could choose to maintain their current level of supply but offer the oil at a lower price. Since the cost of production has decreased due to the new technology, they can afford to reduce their selling price while still making a profit. Lowering the price could attract more customers, increase market demand, and potentially allow Standard Oil to gain a competitive advantage over other oil companies.
Option c) Supply less oil at a given price:
Given the cost-saving benefits of the new technology, it is unlikely that Standard Oil would choose to supply less oil at a given price. The whole purpose of developing the new technology was to reduce costs and increase efficiency, which would allow them to either supply more oil or offer it at a lower price. This option contradicts the logic behind the technological advancement.
Conclusion:
Based on the analysis, it is clear that Standard Oil would be willing to both increase their supply at a given price and decrease their price while maintaining the same supply. This demonstrates how technological advancements can positively impact a company's supply decisions in the market.
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The oil company 'Standard Oil' delivers Q amount of oil to the market. They developed a new technology which helps them drill oil at a cheaper cost. As a result, 'Standard Oil' would be willing to ________a)supply more oil at a given priceb)supply the same amount of oil at a lower pricec)supply less oil at a given priced)both (a) and (b)Correct answer is option 'D'. Can you explain this answer?
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The oil company 'Standard Oil' delivers Q amount of oil to the market. They developed a new technology which helps them drill oil at a cheaper cost. As a result, 'Standard Oil' would be willing to ________a)supply more oil at a given priceb)supply the same amount of oil at a lower pricec)supply less oil at a given priced)both (a) and (b)Correct answer is option 'D'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about The oil company 'Standard Oil' delivers Q amount of oil to the market. They developed a new technology which helps them drill oil at a cheaper cost. As a result, 'Standard Oil' would be willing to ________a)supply more oil at a given priceb)supply the same amount of oil at a lower pricec)supply less oil at a given priced)both (a) and (b)Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The oil company 'Standard Oil' delivers Q amount of oil to the market. They developed a new technology which helps them drill oil at a cheaper cost. As a result, 'Standard Oil' would be willing to ________a)supply more oil at a given priceb)supply the same amount of oil at a lower pricec)supply less oil at a given priced)both (a) and (b)Correct answer is option 'D'. Can you explain this answer?.
The oil company 'Standard Oil' delivers Q amount of oil to the market. They developed a new technology which helps them drill oil at a cheaper cost. As a result, 'Standard Oil' would be willing to ________a)supply more oil at a given priceb)supply the same amount of oil at a lower pricec)supply less oil at a given priced)both (a) and (b)Correct answer is option 'D'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about The oil company 'Standard Oil' delivers Q amount of oil to the market. They developed a new technology which helps them drill oil at a cheaper cost. As a result, 'Standard Oil' would be willing to ________a)supply more oil at a given priceb)supply the same amount of oil at a lower pricec)supply less oil at a given priced)both (a) and (b)Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The oil company 'Standard Oil' delivers Q amount of oil to the market. They developed a new technology which helps them drill oil at a cheaper cost. As a result, 'Standard Oil' would be willing to ________a)supply more oil at a given priceb)supply the same amount of oil at a lower pricec)supply less oil at a given priced)both (a) and (b)Correct answer is option 'D'. Can you explain this answer?.
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