Exercise 3: Why Both Factors Are Treated as Simultaneous, Not Competing — Possible Solution ================================================================================================= Picking a single "correct" explanation would only make sense if the two real factors were mutually exclusive alternatives - if only one of them could have actually been operating at the time, and choosing between them meant ruling the other one out entirely. That's not the real situation here. The OPEC embargo genuinely reduced the total physical amount of oil reaching the US market - a real reduction in supply, regardless of any pricing policy. The price controls, completely separately, prevented the market's own price mechanism from rising to match that reduced supply against ongoing demand. Both of these real conditions existed in the country at the exact same time, and both real mechanisms - one physical, one a policy constraint on prices - work through genuinely different channels to produce the same visible result: not enough gasoline available at the price people wanted to pay it at. Since both were real, active conditions simultaneously, the honest question isn't "which one actually happened" (both did) but "how much of the shortage's own severity is attributable to each one" - a genuinely harder empirical question, since you'd need to estimate what would have happened under the embargo alone, without any price controls, to isolate each factor's own separate contribution. That counterfactual estimation is real, serious economic history work, not something settled by simply declaring one cause more important by assumption. ANSWER: The two factors aren't treated as competing because both were genuinely, simultaneously real and operating through different channels - the embargo physically reduced supply, while the price controls separately prevented prices from rising to match that reduced supply against demand. Since both conditions existed at once, the honest question is how much each specific factor contributed to the shortage's severity, which requires real counterfactual analysis, not a simple either/or choice between two mutually exclusive explanations. WHY THIS WORKS AS AN ANSWER ------------------------------ This explains why the two factors are logically compatible rather than competing explanations, and identifies the real, harder empirical question (relative contribution) that replaces the simpler but incorrect "which one caused it" framing.