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The Price of Gasoline Rises

Question 135

Essay

The price of gasoline rises. Buyers of gasoline notice this and start to find ways to buy less gasoline. Sellers and producers of gasoline notice the price change and start to produce more. Analysts start to predict that sales of electric cars will rise and sales of gasoline-powered cars will stagnate. Use this scenario explain the signal, incentive, and bundle of information roles of price.

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