Question
Please use the concepts of determinants of demand and supply and complex cases to solve the following problem: Assume, over time, consumer incomes generally increase
Please use the concepts of determinants of demand and supply and complex cases to solve the following problem:
Assume, over time, consumer incomes generally increase but also that technological advancements in oil extraction lead to lower prices of crude oil (the primary input for gasoline).
If consumer incomes increase by significantly more than input prices fall, what happens to both the equilibrium price and quantity of gasoline? Remember the market is gasoline, not oil.
If you find it easier to upload a graph to support your written answer please feel free to do so
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