D. A market research team has come up with the demand and supply schedules for gasoline in Motorville in the table below. Use these data below to analyze the situation in the market for gas in Motorville.

Price Quantity demanded Quantity supplied

(cents per (thousands of gallons (thousands of gallons

gallon) per week) per week)

290 80 20

300 70 30

310 60 40

320 50 50

330 40 60

340 30 70

350 20 80

i. Sketch the demand and supply curves of gasoline.

ii. Calculate the equilibrium price and quantity.

E. The market research report also predicts that a rise in the price of crude oil will decrease the quantity of gas supplied by 20,000 gallons a week at each price. Suppose the price of crude oil does rise.

i. Explain how this will affect the market for gas.

ii. Explain how the market adjusts

iii. Show the new equilibrium price and quantity