Suppose the price of crude oil used to produce gasoline rises significantly. At the same time, consumers purchase hybrid cars in great numbers. In the market for gasoline, demand shifts to the ________ and supply shifts to the ________.

Question

Quizplus · Accepted Answer

The price of crude oil rising significantly would lead to a decrease in the supply of gasoline (shift to the left) because it becomes more expensive to produce gasoline. Consumers purchasing hybrid cars in great numbers would lead to a decrease in the demand for gasoline (shift to the left) as hybrid cars typically use less gasoline than traditional cars.

Suppose the Price of Crude Oil Used to Produce Gasoline