PART I - Chapter 1
Calculate the effect of this increase in production on the supply of oil in both the short run and the long run. OPEC’s supply increases from 14 bb/yr to 16 bb/yr as a result. Add 16 bb/yr to the short-run and long-run competitive supply equations. The new total supply equations are: Short-run: ST( = 16 + Sc = 16 + 18 + 0.04P = 34 + 0.04P, and ................
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