Question

A journalist wrote the following about the effects of falling gasoline​ prices:

​"With lower​ prices, demand rises and people consume​ more."
​Source: Jeff​ Sommer, "Cheaper​ Oil, Fatter Wallets and a National​ Opportunity," New York Times​, December​ 20, 2014. Briefly explain whether you agree with the​ journalist's analysis. The​ journalist's statement is
A. true because a decrease in the price of gasoline would result in an increase in quantity demanded​, not an increase in demand​, for gasoline.
B. true because a decrease in the price of gasoline would result in an increase in demand​, not an increase in quantity demanded​, for gasoline.
C. not true because a decrease in the price of gasoline would result in an increase in demand​, not an increase in quantity demanded​, for gasoline.
D. not true because a decrease in the price of gasoline would result in an increase in quantity demanded​, not an increase in demand​, for gasoline.

Answer 1

The correct answer is option D.

Step-by-step explanation:

With the decrease in the price of any commodity, take for instance gasoline, will cause an increase in the quantity demanded. This will be indicated by a downward movement on the same demand curve.

The demand is said to be increased if, at the same price level, the quantity demanded has increased.

So, here the journalist's statement is not true.