Table 3-E -Refer to Table 3-E

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.

Correct Answer:

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