Initially the market is in equilibrium. Then, income of consumers decreases. At the same time, the number of firms decreases. What will happen to the price of gasoline? O It increases. Quantity of Gasoline O It decreases. O It stays the same. O It has an ambiguous change.

Initially the market is in equilibrium. Then, income of consumers decreases. At the same time, the number of firms decreases. What will happen to the price of gasoline? O It increases. Quantity of Gasoline O It decreases. O It stays the same. O It has an ambiguous change.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Consider the market for gasoline.
Price of
Gasoline
Initially the market is in equilibrium. Then, income of consumers decreases. At the same
time, the number of firms decreases. What will happen to the price of gasoline?
It increases.
O It decreases.
D
Quantity of
Gasoline
O It stays the same.
O It has an ambiguous change.

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