The first step is to show that where the supply curve will shift and in the given case it will shift towards right.
Supply may be defined as the production of goods in a market that are made available to the consumers. Supply curve is a curve that depicts the relationship between the price of the product and the available quantity of the product that a consumer is willing and is able to purchase. It is a curve that may be used to determine the price of the products available in the market. The price of the product is determined according to their availability in the market. If the product in available in a lower quantity, then the price of the product is high and if the product is available in higher quantity, then the price of the product is low. OPEC oil cartel has decided to increase the production of oil which means the supply is shifted to right on the supply curve. After this, the equilibrium price will probably fall, unless demand also rises proportionally.
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