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24 September, 07:11

In an economy where heating oil is the primary source of heat for most households, new supplies of natural gas, a substitute for heating oil, are discovered. Natural gas provides heat at a much lower cost. What is the most likely effect of these discoveries on the market price and quantity of heating oil?

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  1. 24 September, 07:53
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    The market price for heating oil will most likely drop and the quantity of heating oil will increase.

    Explanation:

    The reason for this is because the demand for natural gas is greater since it can be bought in larger quantities at a cheaper price. This spike in demand will the price of natural gases to increase and quantity to decrease as more and more people start to use it.
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