Because of a sharp increase in the price of gasoline,the demand for Sports Utility vehicles (SUVs)has decreased.So,the high price of gasoline leads to a
A) leftward shift of the demand curve for SUVs and the supply curve of SUVs.
B) leftward shift of the demand curve for SUVs and no shift in the supply curve of SUVs.
C) leftward shift of the demand curve for SUVs and a rightward shift of the supply curve of SUVs.
D) leftward shift of the supply curve of SUVs and no shift in the demand curve for SUVs.
E) rightward shift of the supply curve of SUVs and no shift in the demand curve for SUVs.

Question

Quizplus · Accepted Answer

The increase in the price of gasoline leads to a decrease in the demand for SUVs, which causes a leftward shift in the demand curve for SUVs. However, there is no reason for the supply of SUVs to change solely based on the price of gasoline, so there is no shift in the supply curve. Therefore, the best choice is B - a leftward shift of the demand curve for SUVs and no shift in the supply curve of SUVs.

Because of a Sharp Increase in the Price of Gasoline,the