What Effect Would a Rise in the Price of Gasoline

question 25

Multiple Choice

What effect would a rise in the price of gasoline have on automakers?

• A) Automakers would produce more gas-efficient cars.
• B) Automakers would decrease the price of gas-efficient vehicles.
• C) Automakers would spend more money to market large vehicles.
• D) A rise in the price of gasoline would not affect an automaker's supply decisions.

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Definitions:

Demand

The total amount of a good or service that consumers are willing and able to purchase at a given price in a specified time period.

Supply

The total amount of a product or service that is available for purchase at any given price.

Labor Union

A collective organization of employees who bargain as a unit with employers.

Autoworkers

Employees in the automotive industry who are involved in the design, development, manufacturing, marketing, and selling of motor vehicles.