You will analyze the Market for Gasoline

Step 1: Draw a supply-and-demand diagram. Price is on the vertical axis, quantity is on the horizontal axis, demand is downward-sloping, supply is upward-sloping, and be sure to label equilibrium price and equilibrium quantity.

Step 2. Change colors! If you have a highlighter or colored pencil (crayon, sharpie, whatever).

Step 3. Show the change in demand or supply (only one curve will shift in each scenario). State if the curve decreases or increases.

Step 4: Show the new equilibrium price and equilibrium quantity.

Step 5: Repeat Steps 1-4 for each scenario. You will have a total of 4 graphs.

• Scenario A: Technological innovation occurs that reduces the cost of producing gasoline.
• Scenario B: Consumers purchase electric vehicles that do not need gasoline.
• Scenario C: A hurricane destroys oil refineries.
• Scenario D: The price of domestic flights increases so consumers decide to take Spring Break road trips.