The price of gasoline increases by $1 per litre. What is the most likely impact on supply and demand?

Question

Quizplus · Accepted Answer

When gasoline prices increase, consumers are likely to reduce their demand for gasoline as it becomes more expensive. This would lead to a decrease in demand. On the other hand, suppliers are likely to increase their supply of gasoline at higher prices, leading to an increase in supply. Therefore, the most likely impact is a decrease in demand and an increase in supply.

The Price of Gasoline Increases by $1 Per Litre