Which of the following would cause a rightward shift in the demand curve for gasoline?
I. A large increase in the price of public transportation.
II. A large decrease in the price of automobiles.
III. A large reduction in the costs of producing gasoline.
A) I only
B) II only
C) I and II only
D) II and III only
E) I, II, and III

Question

Quizplus · Accepted Answer

I. A large increase in the price of public transportation: This would cause consumers to switch from public transportation to driving their own car, increasing the demand for gasoline, resulting in a rightward shift in the demand curve.
II. A large decrease in the price of automobiles: This would make it cheaper for consumers to purchase cars, increasing the number of cars on the road, hence the demand for gasoline would increase, resulting in a rightward shift in the demand curve.
III. A large reduction in the costs of producing gasoline: This would cause the suppliers to produce more gasoline and sell it at a lower price than before. The increase in supply would certainly lead to an increase in demand as well, resulting in a rightward shift in the demand curve.

Which of the Following Would Cause a Rightward Shift in the Demand