Gasoline prices in the United States decreased significantly between 2014 and 2016. A decrease in the price of gasoline, holding other things constant, will cause which of the following to occur?

Question

Quizplus · Accepted Answer

A decrease in the price of gasoline, while holding other factors constant, leads to an increase in the quantity of gasoline demanded. This is because consumers are more willing to buy gasoline when it is cheaper, according to the law of demand. This does not change the demand itself but rather the quantity demanded at the new lower price.

Gasoline Prices in the United States Decreased Significantly Between 2014