Final answer:
The relationship between the price of gasoline and the quantity demanded and supplied is determined by the law of supply and demand. As the price increases, the quantity demanded decreases, and as the price decreases, the quantity demanded increases. Conversely, as the price increases, the quantity supplied increases, and as the price decreases, the quantity supplied decreases.
Step-by-step explanation:
In economics, the relationship between the price of gasoline and the quantity demanded and supplied is determined by the law of supply and demand. According to this law, as the price of gasoline increases, the quantity demanded decreases, and as the price decreases, the quantity demanded increases. On the other hand, as the price of gasoline increases, the quantity supplied increases, and as the price decreases, the quantity supplied decreases.
For example, if the price of gasoline is above the equilibrium price, the quantity demanded will decrease as consumers react to the higher price by finding ways to use less gasoline. At the same time, the quantity supplied will increase as higher prices make it more profitable for gasoline producers to expand their output. This creates excess supply or a surplus, where the quantity supplied exceeds the quantity demanded.