As we discussed in the preceding in 1973 the Organization of Petroleum Exporting Countries ( OPEC ) raised the price of crude oil in world oil markets. Because crude oil is the major input used to make gasoline the higher oil price reduced the supply of gasoline. Long lines at gas stations become commonplace and motorists often had to wait for hours to buy only a few gallons of gas. What was responsible for the long gas lines? Most people blame OPEC. Surely if OPEC had not rasised the price of crude oil the shortage of gasoline would not have occurred. Yet economists blame U.S. government regulations that limited the price oil companies could charge for gasoline. As shown in before OPEC raised the price of crude oil the equilibrium price of gasoline was below the price ceiling. The price regulation therefore had no effect. When the price of crude oil rose however the situation changed. The increase in the price of crude oil raised the cost of producing g...