Respuesta :
Given :
Average price of gasoline $3.25 per gallon in a town .
To Find :
The impact if the price of gas dropped to $0.50 overnight and if it jumped up to $10 per gallon .
Solution :
We know , according to law of demand :
Demand is in inversely proportional to the price of the product if all other constraint remains constant .
a )
If the price of gasoline were to suddenly drop overnight to $0.50 , so the price of product will decrease and by law of demand , the demand will increase which cause quantity of gasoline bought and sold increase .
b )
If the price of gasoline were to suddenly jump to $10 per gallon , it cause in increase in price , which will decrease the quantity of gasoline bought and sold .
Hence , this is the required solution .
When the average price of gasoline is $3.25 per gallon in a town.
Then we Find: When The impact if the price of gas dropped to $0.50 overnight and also if it jumped up to $10 per gallon.
Law of demand
We know, according to the law of demand :
Demand is inversely proportional to the price of the product if all other constraint remains constant.
a ) When If the price of gasoline were to suddenly drop overnight to $0.50 so that the price of the product will decrease and also by the law of demand when the demand will increase which cause the quantity of gasoline bought and also sold increase.
b ) when If the price of gasoline were to suddenly jump to $10 per gallon, it cause in price increase, which will decrease the quantity of gasoline bought and also sold.
Hence proof, this is the required solution.
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