Use the following to answer question:
-(Figure: Demand and Supply of Gasoline)Use Figure: Demand and Supply of Gasoline.When the supply curve shifted from the initial equilibrium,the new intersection of supply and demand has a price of _____ and quantity of 400.This supply shift could have resulted from _____.
A)$1.50;an increase in consumers' income
B)$1.50;an improvement in refining technology
C)$2.00;an increase in the number of buyers
D)$2.00;an increase in consumers' income

Question

Use the following to answer question: 
-(Figure: Demand and Supply of Gasoline)Use Figure: Demand and Supply of Gasoline.When the supply curve shifted from the initial equilibrium,the new intersection of supply and demand has a price of _____ and quantity of 400.This supply shift could have resulted from _____.
A)$1.50;an increase in consumers' income 
B)$1.50;an improvement in refining technology 
C)$2.00;an increase in the number of buyers 
D)$2.00;an increase in consumers' income

Quizplus · Accepted Answer

The new intersection of supply and demand has a price of $1.50 and a quantity of 400. This means that the supply curve must have shifted to the right, resulting in a lower equilibrium price and a higher equilibrium quantity. An improvement in refining technology would increase the supply of gasoline, causing a shift to the right in the supply curve. An increase in consumers' income or an increase in the number of buyers would shift the demand curve to the right, resulting in a higher equilibrium price and quantity. Therefore, option B is the best choice.

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