Question

Suppose there is a 10% rise in the price of gasoline. then, according to the law of –, we expect the quantity of gasoline supplied to –. conversely, if the price goes –, quantity supplied will –, as well.

Answer 1

Law of supply and demand, increase, down, decrease

Answer 2

The full blanks are:

1. Law of supply and demand,

2. Increase,  

3. Decrease.

What is the law of demand and supply?

Law of demand:

The law of demand states that there is an inverse relationship between the price and the quantity demanded. Means if price increases, then the demand for a commodity decreases and vice versa.

Law of supply:

The law of supply states that there is a direct relationship between the price and the quantity supplied, keeping other factors remains constant. Means as the price of a commodity increases, producers increases its supply and vice versa.

Hence, in the above case, due to 10% rise in the price of gasoline. Then, according to the law of demand and supply, we expect the quantity of gasoline supplied to increases. Conversely, if the price goes decreases, quantity supplied will also decrease, as well.

Learn more about demand and supply, refer:

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