Which of the following would cause an increase in the price of gasoline and an expansion in the equilibrium quantity?
A) an increase in the price of crude oil, a key ingredient required for the production of gasoline
B) the introduction of a miracle carburetor that substantially improves the gas mileage of automobiles
C) a recession that substantially reduces the income of households
D) an increase in the popularity and use of Sport Utility Vehicles that consume a lot of gasoline per mile driven

Question

Quizplus · Accepted Answer

An increase in the popularity and use of SUVs, which consume more gasoline, would increase the demand for gasoline, leading to a higher price and greater equilibrium quantity.

Which of the Following Would Cause an Increase in the Price