The United Nations Estimates That Earth's Population Growth Rate Will

The United Nations estimates that Earth's population growth rate will slow down by the year 2050 at which time population may start to decrease. If technological change allows the supply of oil to increase at a constant rate, and nothing else changes, what effect will a slowdown in population growth have on the price of oil?

A) Demand will increase during this period, and the price of oil will continue to increase beyond 2050.
B) Demand will increase more slowly during this period but since supply is growing at a constant rate, the rate of price increase will fall, and ultimately the price of oil may begin to fall.
C) Demand will increase, raising the quantity supplied. Since the quantity supplied will increase, the price must go down.
D) The supply of oil will fall and prices will rise.

Correct Answer:

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