Question

If the price of gasoline increases significantly, then we'd expect the demand curve for large trucks and SUVs to Multiple Choice

a. not shift, but there will be a movement along that demand curve.
b. shift to the right.
c. become upward-sloping.
d. shift to the left.

Answer 1

The demand curve for large trucks and SUVs would shift to the left.

Step-by-step explanation:

The correct answer is d. shift to the left. When the price of gasoline increases significantly, the demand for large trucks and SUVs will decrease. This means that consumers will be less willing to buy these vehicles at higher prices, causing a leftward shift in the demand curve for large trucks and SUVs.

For example, if the price of gasoline doubles, consumers may decide to purchase smaller, more fuel-efficient cars instead of large trucks and SUVs to save on fuel costs. As a result, the demand for large trucks and SUVs will decrease, leading to a leftward shift in the demand curve.

In summary, as the price of gasoline increases, we would expect the demand curve for large trucks and SUVs to shift to the left.