There is an increase in availability of alternative fuels through research and development.Which of the following correctly captures the effect of this change on the market for gasoline?
A)Both equilibrium quantity and price will increase.
B)Both equilibrium quantity and price will decrease.
C)Equilibrium quantity will increase,but equilibrium price will decrease.
D)Equilibrium quantity will decrease,but equilibrium price will increase.

Question

Quizplus · Accepted Answer

With the increase in availability of alternative fuels, consumers have more options besides gasoline, leading to a decrease in demand for gasoline. This results in both the equilibrium quantity and price of gasoline decreasing as consumers switch to alternatives.

There Is an Increase in Availability of Alternative Fuels Through