Question

What will happen in the gasoline market now if buyers expect higher gasoline prices in the near future? a. The demand for gasoline will increase. b. The demand for gasoline will decrease. c. The demand for gasoline will be unaffected. d. The supply of gasoline will increase.

Answer 1

The correct answer is option a.

Step-by-step explanation:

If the buyers expect the price of gasoline to increase soon they will demand more gasoline at present. This is because they will prefer to pay a lower price now than a higher price in the future. So the current demand for gasoline will increase.

It will cause the demand curve for gasoline to shift to the right. At each possible price, the quantity demanded of gasoline will increase. People will purchase at a lower price and hold gasoline for future use.