If the demand for gasoline becomes more elastic over time,
A. the demand curve will shift out.
B. the demand curve will become flatter.
C. other things being equal, the equilibrium price of gasoline must fall.
D. other things being equal, the equilibrium quantity of gasoline must fall.
Answer: B
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Consider a car dealership advertises a three-year lease at $250 per month. When you arrive to apply, you discover that the lease requires a downpayment of $3600 dollars. You will undertake the lease if
A) you value the lease at least $350 per month. B) you value the lease at least $250 per month, the $3600 is a sunk cost. C) you value the lease less than $350 per month. D) you value buying a new car at $400 per month.
The prisoner's dilemma provides an explanation for
a. the price wars that sometimes occur in oligopolies b. the ability of firms in an oligopoly to extract the entire consumer surplus c. the collusive behavior that sometimes occurs in an oligopoly d. the failure of firms in non-competitive industries to maximize profits e. an irrational behavior that occurs in competitive markets