What's New X (255) PHUC DU - Replay Tr X Homework (Ch 04) X MindTap - Cengage Learnir X | Chegg.com * *L03 Aplia Homework Ch 04 X + C https:/g.cengage.com/staticb/ui/evo/index.html? deploymentld=58375321895011539225541353621&elSBN=9781337622387&id=1574880670&s.. 0 * GQ* 30 Khoi CENGAGE | MINDTAP Q Search this course ? My Home Homework (Ch 04) X 3. Understanding changes in equilibrium price and quantity Courses Suppose you are an analyst in the oil refinery industry and are responsible for estimating the equilibrium price and quantity of home heating oil. To do Catalog and Study Tools so, you must consider factors that can affect the supply of and demand for heating oil. A-Z Determinants of the demand for heating oil include household income, the price of an oil furnace (a complementary good for heating oil), and the Rental Options price of natural gas (a substitute good for heating oil). Determinants of the supply of heating oil include the cost of crude oil and the cost of refining College Success Tips crude oil into home heating oil. Career Success Tips Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to the graph parameters. RECOMMENDED FOR YOU (Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly.) Study Tools Graph Input Tool ? Market for Heating Oil Market for Heating Oil bongo Study Tools for Principles of Economics 80 Price of Heating oil 30 . . . . (Dollars per barrel) 70 Supply Quantity 100 Quantity Supplied 60 ? Help 60 Demanded (Thousands of (Thousands of barrels per day) barrels per day) 50 Give Feedback PRICE (Dollars per barrel) Demand Shifters Supply Shifters A+ 30 Price of Natural 10 Cost of Crude Oil 25 20 Demand Gas (Per barrel of ( Dollars per 1,000 heating oil) cubic ft.) Price of an Oil 2000 Cost of Refining Oil 15 Furnace Per barrel of o (Dollars per furnace) heating oil) O 20 40 60 80 100 120 140 160 Average Annual 40 QUANTITY (Thousands of barrels per day) Income Thousands of dollars)What's New X (255) PHUC DU - Replay Tr X Homework (Ch 04) x MindTap - Cengage Learnir X C | Chegg.com * *L03 Aplia Homework Ch 04 X + C https:/g.cengage.com/staticb/ui/evo/index.html? deploymentld=58375321895011539225541353621&elSBN=9781337622387&id=1574880670&s. 0 * GQ*30 Khoi CENGAGE | MINDTAP Q Search this course ? My Home Homework (Ch 04) X PRICE 20 Demand Gas (Per barrel of Courses (Dollars per 1,000 heating oil) cubic ft.) 10 Price of an Oil 2000 Cost of Refining Oil 15 Catalog and Study Tools Furnace Per barrel of (lars per furnace) heating oil) 20 40 60 80 100 120 140 160 Average Annual A-Z QUANTITY (Thousands of barrels per day) 40 Rental Options Income (Thousands of dollars College Success Tips Career Success Tips Initially, the price of natural gas is $10 per 1,000 cubic feet, the price of an oil furnace is $2,000, the average annual household income is $40,000, RECOMMENDED FOR YOU the cost of crude oil is $25 per barrel of heating oil, and the cost of refining oil is $15 per barrel of heating oil. Study Tools The equilibrium quantity in this market is thousand barrels of heating oil per day, and the equilibrium price is $ per barrel. Suppose that the cost of refining oil increases from $15 to $25 for each barrel of heating oil produced. Assuming that the rest of the determinants of supply and demand for heating oil remain equal to their initial values, the market will eventually reach a new equilibrium price of bongo Study Tools for Principles of Economics $ per barrel. . . . . ? Help In the graph input tool, reset the price of heating oil to its equilibrium value that you found in the first question. Then reset the cost of refining oil to its initial value. (Hint: When you click in the box, you will see a circular arrow to the left of the box that enables you to reset numbers to their initial Give Feedback values.) A+ Suppose that instead of a change in the cost of producing heating oil, there was an increase in the price of an oil furnace from $2,000 to $2,100. If the price of heating oil were to remain at the initial equilibrium price you found in the first question, there would be of heating oil, which would exert pressure on prices. Grade It Now Save & Continue Continue without saving