Oil is used to produce gasoline.If the price of oil increases,consumer surplus in the gasoline market
A)decreases.
B)is unchanged.
C)increases.
D)may increase,decrease,or remain unchanged.

Question

Quizplus · Accepted Answer

If the price of oil increases, the cost of producing gasoline will increase, resulting in an increase in the price of gasoline. As a result, consumers will have to pay more for gasoline, which reduces their consumer surplus. Therefore, the correct answer is A) decreases.

Oil Is Used to Produce Gasoline