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Business Data Management · Quiz 1 · 19 Jul 2026 · May 2026 term

Question 12: Suppose conflict escalates between the US and Iran. This…

Question 12

+2 marksOne correct option

Suppose conflict escalates between the US and Iran. This conflict leads to a naval blockade in the Strait of Hormuz, a critical transit route through which 20% of the world's crude oil passes. At the same time, widespread panic drives regular consumers and commercial airlines to stockpile fuel out of fear that supplies will dry up by the following week. This sudden surge in panic buying, happening along with the supply disruption, creates a severe oil shortage.
How do these two events happening at the exact same time affect the global equilibrium price (P*) and equilibrium quantity (Q*) of crude oil?

  1. A

    Price will decrease; Quantity will increase.

  2. B

    Price will increase; Quantity change is uncertain

  3. C

    Price change is uncertain; Quantity will decrease.

  4. D

    Price will increase; Quantity will decrease.

Show answer

Correct answer

  • B

    Price will increase; Quantity change is uncertain

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Question 12 of 23 in the IIT Madras BS Business Data Management (BDM) Quiz 1 paper sat on 19 Jul 2026, in the May 2026 term (Business Data Management 16 Jul 26). It carries 2 marks.

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