Question

Given a normal market demand curve for unleaded gasoline, if the price of shipping a gallon of gasoline rises from $.50 per gallon to $.75 per gallon, then there is a/an

a. increase in demand for unleaded gasoline.

b. increase in quantity demanded of unleaded gasoline.

c. decrease in demand for unleaded gasoline.

d. decrease in quantity demanded of unleaded gasoline.

e. increase in supply of gasoline.

Answer 1

Answer:

d. decrease in quantity demanded of unleaded gasoline.

Explanation:

Since the shipping cost of a gallon of gasoline is increased from $0.50 per gallon to $0.75 per gallon that reflect the increase in price

As the price is increased, the quantity demanded of unleaded gasoline is decreases as the shipping cost increases which affect the other factors

So, at one time the price increases with the decreases in the quantity demanded