Answer to Question #71172 in Microeconomics for Eman ahmed

Question

Consider the continuous decline in oil price that has hit most of the oil producing economy across the globe, and members of Organization of Petroleum Exporting Countries (OPEC) will be having their meeting by 15th December 2016. As an economic expert, kindly advice OPEC on what needs to be done in order to reverse the continuous decrease in oil price (Note: Support your answer with the required graph)?

Answer 1

To reverse the continuous decrease in oil price OPEC should decrease supply of petroleum to decrease quantity supplied and increase equilibrium price.