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In recent weeks gasoline prices have increased significantly (in Emporia the current price is about $3.19 per gallon and has gone up more than 50
In recent weeks gasoline prices have increased significantly (in Emporia the current price is about $3.19 per gallon and has gone up more than 50 cents in the past 5 weeks). (a) What impact will this higher price of gasoline have on the supply curve of driving in gasoline engine cars (not electric or hybrid) travel. (b) What happens to the equilibrium price and quantity of driving? Please explain and include a graph with the demand and supply curves of gasoline engine cars. You must include one graph only and this graph should show both the original and new demand and supply curves (if the curves shift) and must also indicate the change in equilibrium price and quantity (if any)
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