Hugo Chávez was the president of Venezuela.Venezuela is a major producer of oil products,which remain a critical component of Venezuela's economy.Suppose that President Chávez wanted to increase his popularity with the citizens of Venezuela and enacted a government policy to reduce the price of gasoline sold at state-owned gas stations to 50% of the previous price.Assuming a downward-sloping demand curve for gasoline,in theory,this policy would result in a quantity of gasoline demanded that is _____ the quantity of gasoline supplied.

Question

Quizplus · Accepted Answer

A decrease in the price of gasoline would increase the quantity of gasoline demanded by consumers, leading to an increase in demand. If the supply remains constant, then there will be a shortage of gasoline, meaning that the quantity demanded will be greater than the quantity supplied. Therefore, the answer is B.

Hugo Chávez Was the President of Venezuela