Question

Consider the following factor and indicate whether it increases or decreases the equilibrium price of gasoline and the equilibrium quantity of gasoline sold. In this problem, assume that gasoline is a normal good.

When the number of sellers decreases, the


Choose one:
A. supply curve shifts to the right.
B. demand curve shifts to the right.
C. demand curve shifts to the left.
D. supply curve shifts to the left.


As a result,


Choose one:
A. price decreases and quantity decreases.
B. price decreases and quantity increases.
C. price increases and quantity decreases.
D. price increases and quantity increases.

Answer 1

The answer for your question is A,D.

Answer 2

D. supply curve shifts to the left

C. price increases and quantity decreases

Explanation:

Since the number of sellers decreases, the quantity available at the same price decreases. This shifts the supply curve to the left.

When the supply curve shifts to the left, the equilibrium point shifts to the left (and up the demand curve). Hence the price increases and the quantity decreases.