ECONOMICS (CBSE/UGC NET)

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ECONOMICS

MARKETS AND PRICES

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
OPEC is expected to cut output of crude oil by more than 1 million barrels per day. The cut is intended to maintain the high world price for oil. All other things being equal, which one of the following would happen to the world market for crude oil? there would be a
A
Movement along the supply curve
B
A shift to the right of the supply curve
C
A movement along the demand curve
D
A shift to the left of the demand curve
Explanation: 

Detailed explanation-1: -The 10 OPEC members required to cut production pumped 920, 000 bpd below the group’s January target, the survey found. The shortfall in December was 780, 000 bpd.

Detailed explanation-2: -CAPE TOWN, Oct 18 (Reuters)-The OPEC+ oil producers group moved unanimously to cut output to prevent a crisis and stem a tide of volatility, OPEC’s secretary-general told an energy conference in South Africa on Tuesday.

Detailed explanation-3: -OPEC and non-OPEC allies, a group often referred to as OPEC+, decided at their first face-to-face gathering in Vienna since 2020 to reduce production by 2 million barrels per day from November.

Detailed explanation-4: -Traders were paying money to get rid of oil. o Shortage of storage space forced OPEC to cut supply. Desired outcome of the supply cut was to increase oil price which has fallen into negatives due to record surplus due to worldwide lockdown.

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