ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -When gasoline prices increase, the amount a consumer is willing to pay for a more fuel-efficient vehicle should increase. In fact, there is evidence that when gasoline prices increase, demand for less fuel-efficient vehicles falls, as consumers demand higher fuel economy to reduce the cost of driving.

Detailed explanation-2: -Economic growth can affect natural gas demand and prices During periods of economic growth, increases in demand for goods and services from the commercial and industrial sectors may increase natural gas consumption.

Detailed explanation-3: -The supply of gasoline is largely driven by crude oil supply and refining, imports of gasoline, and gasoline inventories (stocks). Stocks are the cushion between major short-term supply and demand imbalances, and stock levels can have a significant impact on gasoline prices.

Detailed explanation-4: -Gasoline and cars are complementary goods because they are used together. If there is an increase in the price of gasoline, the demand for cars will decrease. This will shift the demand curve for cars to the left, leading to a decrease in the equilibrium price and quantity of cars.