Which of the following would cause the supply curve to shift to the right in the market for gasoline? a

Economics Dec 10, 2020

Which of the following would cause the supply curve to shift to the right in the market for gasoline?

a. An increase in consumer income in the area.

b. A decrease in the price of gasoline.

c. A decrease in the price of crude oil used to produce gasoline.

d. A decrease in the number of consumers in the area.

Expert Solution

The correct answer is c. A decrease in the price of crude oil used to produce gasoline.

One of the factors that affect the supply of a product is the cost of production. A decrease in the price of crude oil which is an input in production of gasoline will reduce the cost of production and therefore, more gasoline will be produced. An increase in the production of gasoline will lead to increase in the supply of gasoline which is indicated by a rightward shift of the supply curve.

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