What Will Happen to the Equilibrium Price and Quantity of Gasoline

question 178

Multiple Choice

What will happen to the equilibrium price and quantity of gasoline powered lawnmowers if the prices of battery powered lawnmowers goes down and, at the same time, firms switch from producing gasoline powered lawnmowers to producing battery powered lawnmowers?

• A) price will fall and the effect on quantity is ambiguous
• B) price will rise and the effect on quantity is ambiguous
• C) quantity will fall and the effect on price is ambiguous
• D) quantity will rise and the effect on price is ambiguous

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Definitions:

Total Revenue

The comprehensive amount of financial earnings a company gathers from its sales and services over a designated period.

Elastic Demand Curve

A demand curve that indicates a high responsiveness or sensitivity of quantity demanded to a change in price.

Shell-brand Gasoline

A type of fuel sold under the Shell brand name, which is a global group of energy and petrochemical companies.

Heating Oil

A low viscosity, liquid petroleum product used as a fuel oil for furnaces or boilers in buildings.