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Question
which of these is the most likely consequence of falling petroleum prices?
a. increased demand for electric cars
b. more sales of traditional, large cars
c. less interest in public transportation
d. increased interest in oil exploration
When petroleum prices fall, the cost of operating traditional, large cars (which typically consume more fuel) decreases. This makes them more attractive to consumers compared to electric cars (which may be chosen for fuel - cost savings when petroleum is expensive). Public transportation demand is often related to overall commuting costs, and with cheaper fuel, people might be less inclined to use it. However, the most direct consequence is on the sales of traditional cars. Oil exploration becomes less profitable with lower prices, so interest in it would likely decrease.
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B. More sales of traditional, large cars