A market research team has com up with the demand and supply schedules for gasoline in Motorville in the table below . Use these data to analyze the situation in the market for gas in Motorville .
a) Draw a figure showing the demand curve for gasoline and the supply curve of gasoline . What are the equilibrium price and quantity ?
b) Suppose the price is $1.30 . Describe the situation in the market and explain how the market adjusts . Now suppose the price is $1.00 . Describe the situation in the market and explain how the market adjusts .
c) The market research report also predicts that a rise in the price of crude oil will decrease the quantity of gas supplied by 20000 gallons a week at each price . Suppose the price of crude oil does rise . Use your figure to show how this will affect the market for gas . How will the market adjust ? What will be the new equilibrium price and quantity ?
(cents per gallon) Quantity demanded
(thousands of gallons per week) Quantity supplied
(thousands of gallons per week)
90 80 20
100 70 30
110 60 40
120 50 50
130 40 60
140 30 70
150 20 80
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.Read more
Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.Read more
Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.Read more
Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.Read more
By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.Read more