During 2008 the supply of gasoline decreased while at the same time the demand for gasoline increased.If the magnitude of the increase in demand was greater than the magnitude of the decrease in supply,then the equilibrium price of gasoline ________ and the equilibrium quantity ________.

Question

Quizplus · Accepted Answer

When demand increases more significantly than supply decreases, the equilibrium price increases due to higher demand. The equilibrium quantity also increases because the effect of increased demand outweighs the effect of decreased supply.

During 2008 the Supply of Gasoline Decreased While at the Same