The decrease in the price of gasoline to a national average of less than $3.20 during the summer of 2012 was most likely a result of
A)an increase in demand due to reduced summer driving.
B)an increase in supply resulting from higher refinery output.
C)an increase in demand due to increase in summer driving along with a decrease in supply resulting from reduced refinery output.
D)an increase in supply resulting from higher refinery output along with a decrease in demand in summer driving.

Question

Quizplus · Accepted Answer

The decrease in gasoline prices to a national average of less than $3.20 during the summer of 2012 was most likely a result of an increase in supply resulting from higher refinery output. This is due to the fact that there was no significant increase in demand during that summer, which suggests that the increase in supply was the dominant factor in driving the price down. Additionally, there were no major disruptions to the global oil market at that time, which also supports the idea that the change in supply was the main driver of the price decrease.

The Decrease in the Price of Gasoline to a National