Consider the following article.

Pump Prices in US Soar as Supply Cracks Outweigh Weak Demand

West Coast, Midwest low on fuel amid refinery outages, work

Physical gasoline market is diverging from bearish futures

ByChunzi Xu

September 24, 2022

The US is running low on gasoline on the West Coast and in the Midwest, where prices are surging on the street, defying falling futures markets.

Wholesale fuel prices in Los Angeles, San Francisco and Portland have all reached record highs this week as a spate of unplanned refinery shutdowns compoundedscheduled maintenance, at a time when seasonal stockpiles are already at their lowest level in 14 years.

A similar dynamic isplaying outin the Midwest, where a deadly refinery fire sent Chicago wholesale gasoline surging, matching its most expensive level ever relative to futures. Meanwhile, pump prices are rising again in many states, as is the national average, according to auto clubAAA.

Prices are likely to remain high without easy resupply options. California is geographically isolated from supply hubs in the country, and receives imports from places like Asia and Europe that often take weeks to arrive. The Nord Harmony is due to offload fuel in Los Angeles in the next few days, but a dearth of fresh loadings mean imports will remain scarce, vessel tracking data show.

(Source: https://www.bloomberg.com/news/articles/2022-09-23/gasoline-prices-in-us-soar-as-supply-cracks-trump-weak-demand)

(a) According to the article, is gasoline (petrol) supply high or low in the US? Provide some evidence from the article supporting your view.(3marks)

(b) Based on your answer to Question (a), explain what would happen in the gasoline market using demand and supply curves. (You do not need to draw a diagram.) In terms of price, is the conclusion you obtain from the demand and supply model consistent with what is said in the article?(4marks)

c) Now suppose the events in the article occur during a holiday season where American consumers go on holiday (driving their cars). What effect would this have on the market price and quantity in the demand and supply model from Question (b)? (You do not need to draw a diagram.)(3marks)