Petrol and Kerosene are jointly obtained from crude oil. If the supply of petrol increases, the
Cost of crude oil production has increased
Supply of kerosene will rise
Supply of kerosene will remain unchanged
Supply of kerosene will fall
Correct answer is B
If the supply of petrol increases, the supply of kerosene will rise. This is because petrol and kerosene are jointly supplied, meaning that they are produced from the same source. When the supply of petrol increases, it means that there is more crude oil available to be used to produce kerosene. As a result, the supply of kerosene will also increase.
The cost of crude oil production has no bearing on the supply of kerosene. The cost of production will only affect the supply of kerosene if it becomes too expensive to produce kerosene. However, in this case, the supply of kerosene would fall, not rise.
