ECS1501
Assignment 3 2025
Unique number:
Due Date: 21 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.
Terms of use
By making use of this document you agree to:
Use this document as a guide for learning, comparison and reference purpose,
Terms of use
Not to duplicate, reproduce and/or misrepresent the contents of this document as your own work,
By making use of this document you agree to:
Use this document
Fully accept the consequences
solely as a guide forshould you plagiarise
learning, reference,or and
misuse this document.
comparison purposes,
Ensure originality of your own work, and fully accept the consequences should you plagiarise or misuse this document.
Comply with all relevant standards, guidelines, regulations, and legislation governing academic and written work.
Disclaimer
Great care has been taken in the preparation of this document; however, the contents are provided "as is" without any express or
implied representations or warranties. The author accepts no responsibility or liability for any actions taken based on the
information contained within this document. This document is intended solely for comparison, research, and reference purposes.
Reproduction, resale, or transmission of any part of this document, in any form or by any means, is strictly prohibited.
, +27 67 171 1739
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.
Disclaimer
Great care has been taken in the preparation of this document; however, the contents are provided "as is"
without any express or implied representations or warranties. The author accepts no responsibility or
liability for any actions taken based on the information contained within this document. This document is
intended solely for comparison, research, and reference purposes. Reproduction, resale, or transmission
of any part of this document, in any form or by any means, is strictly prohibited.
Assignment 3 2025
Unique number:
Due Date: 21 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.
Terms of use
By making use of this document you agree to:
Use this document as a guide for learning, comparison and reference purpose,
Terms of use
Not to duplicate, reproduce and/or misrepresent the contents of this document as your own work,
By making use of this document you agree to:
Use this document
Fully accept the consequences
solely as a guide forshould you plagiarise
learning, reference,or and
misuse this document.
comparison purposes,
Ensure originality of your own work, and fully accept the consequences should you plagiarise or misuse this document.
Comply with all relevant standards, guidelines, regulations, and legislation governing academic and written work.
Disclaimer
Great care has been taken in the preparation of this document; however, the contents are provided "as is" without any express or
implied representations or warranties. The author accepts no responsibility or liability for any actions taken based on the
information contained within this document. This document is intended solely for comparison, research, and reference purposes.
Reproduction, resale, or transmission of any part of this document, in any form or by any means, is strictly prohibited.
, +27 67 171 1739
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.
Disclaimer
Great care has been taken in the preparation of this document; however, the contents are provided "as is"
without any express or implied representations or warranties. The author accepts no responsibility or
liability for any actions taken based on the information contained within this document. This document is
intended solely for comparison, research, and reference purposes. Reproduction, resale, or transmission
of any part of this document, in any form or by any means, is strictly prohibited.
