Use the following to answer question: -(Figure: Demand and Supply of Gasoline)Use Figure: Demand and Supply of Gasoline.Given the equilibrium after a change in supply from S₁ to S₂: A)at the old price of $2.50,there will be pressure for the price to fall. B)the new price will be $2.00. C)the new quantity will be 600. D)the price will remain constant.

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After the increase in supply, the new equilibrium point is at a lower price level of $2.00 and a higher quantity level of 600. At the old price level of $2.50 there will be excess supply as the quantity supplied is now greater than the quantity demanded, which creates pressure for the price to fall until a new equilibrium is reached. Therefore, option A is correct. Option B and C are incorrect as they provide the new price and quantity levels before confirming the pressure for price adjustment. Option D is incorrect as there has been a shift in supply resulting in a change in equilibrium price and quantity.

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