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Figure: Shifts in Demand and Supply II
-(Figure: Shifts in Demand and Supply II) Look at the figure Shifts in Demand and Supply II. The figure shows how supply and demand might shift in response to specific events. Suppose vast new oilfields are discovered offshore of California and gasoline prices fall. Which panel BEST describes how this will affect the market for sport utility vehicles, a complement in consumption to gasoline?
A)panel A
B)panel B
C)panel C
D)panel D

Question

Use the following to answer questions :
Figure: Shifts in Demand and Supply II 
-(Figure: Shifts in Demand and Supply II) Look at the figure Shifts in Demand and Supply II. The figure shows how supply and demand might shift in response to specific events. Suppose vast new oilfields are discovered offshore of California and gasoline prices fall. Which panel BEST describes how this will affect the market for sport utility vehicles, a complement in consumption to gasoline?
A)panel A 
B)panel B 
C)panel C 
D)panel D

Quizplus · Accepted Answer

The discovery of new oilfields and the subsequent fall in gasoline prices would increase the demand for sport utility vehicles, as they are complements in consumption to gasoline. Panel A, which shows a rightward shift in the demand curve, best represents this scenario.

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