Table 3-E -Refer to Table 3-E

question 223

Multiple Choice

Table 3-E
$\begin{array}{ccc}\text { Price per gallon } &\text { Quantity Demanded }&\text { Quantity Supplied of } \\&\text { (thousands of gallons) }&\text { gasoline (thousands of }\\&&\text { gallons) }\\\$ 4.50 & 600 & 2,000 \\\$ 4.25 & 700 & 1,900 \\\$ 4.00 & 800 & 1,800 \\\$ 3.75 & 950 & 1,700 \\\$ 3.50 & 1,200 & 1,600 \\\$ 3.25 & 1,500 & 1,500 \\\$ 3.00 & 1,800 & 1,400 \\\$ 2.75 & 2,100 & 1,300 \\\$ 2.50 & 2,400 & 1,200\end{array}$


-Refer to Table 3-E.Assuming the market for gasoline is initially in equilibrium, what is likely to happen when there is a significant decrease in the price of sport utility vehicles? (Assume that sport utility vehicles get very low gas mileage.)

• A)The market price and quantity of gasoline will both decrease.
• B)The market price for gasoline will increase and the quantity demanded will decrease.
• C)The market price of gasoline will decrease and the quantity demanded will increase.
• D)Both the market price and quantity of gasoline demanded will increase.
• E)There will be no change in the price of gasoline.