Suppose the market for gasoline is in equilibrium.You have heard that the price of crude oil is falling because of new oil discoveries.You are also aware that the number of car and truck drivers is steadily rising.Knowing this,you predict that the price of gasoline will _____ and the quantity of gasoline bought and sold will _____.
A)rise;rise
B)rise;fall
C)rise or fall;rise
D)rise or fall;fall

Question

Quizplus · Accepted Answer

The decrease in the price of crude oil may lead to a decrease in the price of gasoline, which could potentially lead to an increase in the quantity of gasoline bought and sold. However, the steady increase in the number of car and truck drivers would increase the demand for gasoline, which would result in an increase in the price of gasoline and an increase in the quantity of gasoline bought and sold. Therefore, the price of gasoline may either rise or fall, but the quantity of gasoline bought and sold will mostly likely rise.

Suppose the Market for Gasoline Is in Equilibrium