If demand is constant,a decrease in the supply of gasoline will cause the equilibrium price:

Question

Quizplus · Accepted Answer

If the supply of gasoline decreases, the market will experience a shortage, leading to an increase in the equilibrium price. However, the decrease in the supply will also lead to a decrease in the equilibrium quantity. This is because fewer units of gasoline are available at each price level, and consumers will reduce their demand as prices rise. Therefore, the correct answer is A, as the equilibrium price will rise, and the equilibrium quantity will fall.

If Demand Is Constant,a Decrease in the Supply of Gasoline