Question

If price was $2.00 per gallon and decreased to $1.40 per gallon, how does quantity of gasoline demanded change?

Answer 1

The quantity of gasoline demanded will increase.

Explanation:

We are asked to find the change in demand of gasoline, when price of gasoline decreased from $2 per gallon to $1.40.

We know that quantity of a product demanded is inversely proportional to supply of the product.

This means that an increase in price will decrease the quantity demanded, while a decrease in price will increase the demand.

Since the price of gasoline is decreased by $0.60 per gallon, therefore, the quantity of gasoline demanded will increase.

Answer 2

The price and demand are inversely proportional to each other, When the price is less, the demand is higher. When the price is high, the demand is low.

So , as given, the gasoline prices has been decreased from $2.00 per gallon to $1.40 per gallon, so now the demand will increase. The quantity of gasoline that will be in demand will increase.