Question

Gasoline prices increase by 50 percent and other things remain the same. as a result, there is no change in the quantity of gasoline demanded. a decrease in the demand for gasoline. a decrease in the quantity of gasoline demanded. an increase in the demand for gasoline. more information is needed to determine if the demand for gasoline increases or decreases.

Answer 1

If prices of gasoline increase by 50 percent and all else is held constant (including the supply side), then the quantity of gasoline demanded would be expected to decrease. This would be the case unless demand were completely inelastic, that is to say, the demand curve were vertical, which would not be the case in the real world - people would drive less or switch to more efficient alternatives.

Answer 2

As a result, there is a decrease in the quantity of gasoline demanded. Demand is the amount of a commodity or a service that consumers are willing and able to buy at a given market price while supply is the quantity of goods produced by the producers to the market. Increase in prices of a commodity leads to a decrease in the quantity demanded while a decrease in price while keeping other factors constant results to an increase in demand.