The island of Borneo is famous internationally for its rainforests which can bring many benefits, both private and external. However, the economy is heavily dependent on a finite resource, oil. The discovery of oil reserves in other parts of the world led to a significant fall in the world price of oil. This affected producers of oil in Borneo. Discuss whether or not the fall in the price of a product is a disadvantage to an economy.
Exam No：0455_w21_qp_21 Year：2021 Question No：3(d)
Answer:
Knowledge points:
2.6.2 consequences of price changes (Demand and supply diagrams to be used to illustrate these changes in market conditions and their consequences for equilibrium price and sales.)
2.7.5 significance of PED (The implications for decision making by consumers, producers and government.)
Solution:
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