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02-06-2023
Business

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Suppose that the inverse demand and supply functions for natural gas are given by: P = 10 + Qs +0.1Po and P = 14 - Qd +0.1Po, where Qs and Qd are quantities of natural gas in billion cubic feet, P is the price of natural gas in USD/thousand cubic feet, and Po is the price of oil, equal to 40 USD/barrel. If the price of oil increases to Po = 60 USD/bbl, then the equilibrium market price of natural gas is:
Group of answer choices
A. 16 USD/tcf
B. 25 USD/tcf
C. 18 USD/tcf
D. 20 USD/tcf

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