Suppose that the long-run world demand and supply, Ask an Expert

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Suppose that the long-run world demand and supply elasticities of crude oil are -0.906 and 0.515, respectively. The current long-run equilibrium price is $30 per barrel and the equilibrium quantity is 16.88 billion barrels per year. Derive the linear long-run demand and supply equations. Next, suppose the long-run supply curve you derived above consists of competitive supply and OPEC supply. If the long-run competitive supply equation is: S_C = 7.78 + 0.29P, what must be OPEC's level of production in this long-run equilibrium?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91707310

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