Final answer:
The cost of gasoline has a direct proportional relationship with the number of gallons purchased, as dictated by the principles of demand and supply. High prices may lead to reduced consumption, while prices below equilibrium can increase demand and lower supply.
Step-by-step explanation:
The cost of gasoline is directly proportional to the number of gallons you purchase. This means that as the number of gallons increases, the cost also increases in a straight-line relationship. A typical American buys about 400 gallons of gasoline per year for personal transportation. The relationship between cost and gallons is governed by the laws of demand and supply.
For example, with an equilibrium price of $1.40 per gallon, if you purchase 10 gallons, it would cost you $14.00. However, if the prices rise above the equilibrium, as mentioned where the price is $1.60 per gallon, the quantity demanded goes down due to higher costs, leading to a surplus in the gasoline market. Conversely, if the price is below the equilibrium, at $1.20 per gallon for instance, the quantity demanded increases and the quantity supplied decreases.