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Chapter 3: Q. 2 - For Critical Thinking (page 70)

Why might increases in oil storage prices be required to

induce owners of aged storage tanks to increase the quan

tity of tank storage space supplied?(Hint:Owners must

incur expenses to refurbish storage tanks.)

Short Answer

Expert verified

A price rise leads to expectations of better services.

Step by step solution

01

Step1. Given information

Prices have increased of the oil storage.

02

Step2. Explanation

Since a price increase leads to higher expectations on the consumer side, they will expect better services say refurbishment of the storage tanks to increase the storage capacity as they are paying higher prices.

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