Final answer:
Expectations of higher future gasoline prices due to election uncertainty can lead to a change in the current equilibrium price and quantity, potentially causing today's price to rise and quantity to increase. If prices do rise, a surplus occurs, creating pressure to reduce prices.
Step-by-step explanation:
The expectation of higher gasoline prices due to uncertainty around an election can lead to a change in the current equilibrium price and quantity of gasoline. If consumers and producers expect higher prices in the future, they may change their behavior today. Consumers may attempt to buy more gasoline now before prices rise, leading to an increased quantity demanded, while producers may hold off on selling, expecting to get a higher price later, leading to a decreased quantity supplied. This would typically push today's price higher and create a higher equilibrium quantity as the market adjusts.
However, if we consider the provided information where an above-equilibrium price leads to a surplus, the current situation forms a different dynamic. As prices rise, quantity supplied has increased from 600 to 680 gallons, indicating that producers are willing to supply more at the expected higher prices. Conversely, the quantity demanded at the higher price of $1.80 has fallen to 500 gallons, signaling that consumers are not willing to purchase as much at this price. This creates an excess supply or surplus. Surpluses pressure sellers to reduce their prices, which would then increase the quantity demanded, moving the price back towards the equilibrium.