If the Price of Gasoline Increases, Ceteris Paribus, What Happens

question 336

Multiple Choice

If the price of gasoline increases, ceteris paribus, what happens to equilibrium price and consumer surplus for automobiles at the new price?

• A) Equilibrium price rises and consumer surplus rises.
• B) Equilibrium price falls and consumer surplus rises.
• C) Equilibrium price rises and consumer surplus falls.
• D) Equilibrium price falls and consumer surplus falls.