If more people buy larger cars that have lower gas mileage, the equilibrium price of gasoline will
And the equilibrium quantity will .

Question

Quizplus · Accepted Answer

If more people buy larger cars with lower gas mileage, the demand for gasoline will increase. This will shift the demand curve to the right, leading to a higher equilibrium price. However, the increase in demand will also encourage suppliers to produce more gasoline, leading to an increase in the equilibrium quantity. Overall, the equilibrium price will rise, but the effect on the equilibrium quantity is ambiguous.

If More People Buy Larger Cars That Have Lower Gas