If Scientists Discover a New Form of Energy That Cuts

Multiple Choice

If scientists discover a new form of energy that cuts the cost of producing electricity to the equivalent of $10 a barrel, what will happen to the market for oil?

A) The price of oil would rise because of the competition from the new energy source.
B) The supply of oil would decrease because few suppliers can profitably produce oil at $10 a barrel.
C) There would be no effect on the market for oil.
D) Demand for oil would decrease over time since no one would pay more than $10 for a barrel of oil to produce energy.