ECS1501 Assignment 3 2025
Unique Number:
Due date: 31 July 2025
QUESTION 1
i.
An economist would describe the market condition in the cartoon as an oversupply or
excess in the oil market. The cartoon illustrates this by showing oil spilling everywhere,
symbolising an excessive amount of oil that exceeds current demand. This typically happens
due to overproduction, reduced demand, or geopolitical factors that disrupt market balance.
This situation often leads to falling oil prices due to surplus production. The image of oil
taking over the room highlights the uncontrollable nature of the surplus and the potential
economic consequences such as reduced profits for oil producers, job losses in the energy
sector, and global market instability. This typically reflects a disequilibrium in the market.
DISCLAIMER & TERMS OF USE
Educational Aid: These study notes are intended to be used as educational resources and should not be seen as a
replacement for individual research, critical analysis, or professional consultation. Students are encouraged to perform
their own research and seek advice from their instructors or academic advisors for specific assignment guidelines.
Personal Responsibility: While every effort has been made to ensure the accuracy and reliability of the information in
these study notes, the seller does not guarantee the completeness or correctness of all content. The buyer is
responsible for verifying the accuracy of the information and exercising their own judgment when applying it to their
assignments.
Academic Integrity: It is essential for students to maintain academic integrity and follow their institution's policies
regarding plagiarism, citation, and referencing. These study notes should be used as learning tools and sources of
inspiration. Any direct reproduction of the content without proper citation and acknowledgment may be considered
academic misconduct.
Limited Liability: The seller shall not be liable for any direct or indirect damages, losses, or consequences arising from
the use of these notes. This includes, but is not limited to, poor academic performance, penalties, or any other negative
consequences resulting from the application or misuse of the information provided.
, For additional support +27 81 278 3372
QUESTION 1
i.
An economist would describe the market condition in the cartoon as an oversupply
or excess in the oil market. The cartoon illustrates this by showing oil spilling
everywhere, symbolising an excessive amount of oil that exceeds current demand.
This typically happens due to overproduction, reduced demand, or geopolitical
factors that disrupt market balance. This situation often leads to falling oil prices due
to surplus production. The image of oil taking over the room highlights the
uncontrollable nature of the surplus and the potential economic consequences such
as reduced profits for oil producers, job losses in the energy sector, and global
market instability. This typically reflects a disequilibrium in the market.
ii.
(iii) Explanation of the Adjustment Process to the New Equilibrium in the Oil
Market
When there is an oil glut (oversupply), the quantity of oil supplied exceeds the
quantity demanded at the original price level (P₁). This creates excess supply,
resulting in unsold oil inventories.
Unique Number:
Due date: 31 July 2025
QUESTION 1
i.
An economist would describe the market condition in the cartoon as an oversupply or
excess in the oil market. The cartoon illustrates this by showing oil spilling everywhere,
symbolising an excessive amount of oil that exceeds current demand. This typically happens
due to overproduction, reduced demand, or geopolitical factors that disrupt market balance.
This situation often leads to falling oil prices due to surplus production. The image of oil
taking over the room highlights the uncontrollable nature of the surplus and the potential
economic consequences such as reduced profits for oil producers, job losses in the energy
sector, and global market instability. This typically reflects a disequilibrium in the market.
DISCLAIMER & TERMS OF USE
Educational Aid: These study notes are intended to be used as educational resources and should not be seen as a
replacement for individual research, critical analysis, or professional consultation. Students are encouraged to perform
their own research and seek advice from their instructors or academic advisors for specific assignment guidelines.
Personal Responsibility: While every effort has been made to ensure the accuracy and reliability of the information in
these study notes, the seller does not guarantee the completeness or correctness of all content. The buyer is
responsible for verifying the accuracy of the information and exercising their own judgment when applying it to their
assignments.
Academic Integrity: It is essential for students to maintain academic integrity and follow their institution's policies
regarding plagiarism, citation, and referencing. These study notes should be used as learning tools and sources of
inspiration. Any direct reproduction of the content without proper citation and acknowledgment may be considered
academic misconduct.
Limited Liability: The seller shall not be liable for any direct or indirect damages, losses, or consequences arising from
the use of these notes. This includes, but is not limited to, poor academic performance, penalties, or any other negative
consequences resulting from the application or misuse of the information provided.
, For additional support +27 81 278 3372
QUESTION 1
i.
An economist would describe the market condition in the cartoon as an oversupply
or excess in the oil market. The cartoon illustrates this by showing oil spilling
everywhere, symbolising an excessive amount of oil that exceeds current demand.
This typically happens due to overproduction, reduced demand, or geopolitical
factors that disrupt market balance. This situation often leads to falling oil prices due
to surplus production. The image of oil taking over the room highlights the
uncontrollable nature of the surplus and the potential economic consequences such
as reduced profits for oil producers, job losses in the energy sector, and global
market instability. This typically reflects a disequilibrium in the market.
ii.
(iii) Explanation of the Adjustment Process to the New Equilibrium in the Oil
Market
When there is an oil glut (oversupply), the quantity of oil supplied exceeds the
quantity demanded at the original price level (P₁). This creates excess supply,
resulting in unsold oil inventories.
