Use the figure below to answer the following question(s).
Figure 3-14

Refer to Figure 3-14. The gasoline market was initially in equilibrium at point e. Other things constant, a decrease in the price of crude oil, an important ingredient used to produce gasoline, would likely move the equilibrium in this market toward point

Question

Use the figure below to answer the following question(s).
Figure 3-14

Refer to Figure 3-14. The gasoline market was initially in equilibrium at point e. Other things constant, a decrease in the price of crude oil, an important ingredient used to produce gasoline, would likely move the equilibrium in this market toward point

Quizplus · Accepted Answer

A decrease in the price of crude oil, an important ingredient used to produce gasoline, would lower the cost of producing gasoline, shifting the supply curve to the right from S1 to S2. This would lead to a lower equilibrium price and a higher equilibrium quantity, moving the market towards point s.

Use the Figure Below to Answer the Following Question(s)