ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -More fuel-efficient cars means there is less need for gasoline. This causes a leftward shift in the demand for gasoline and thus oil. Since the demand curve is shifting down the supply curve, the equilibrium price and quantity both fall.

Detailed explanation-2: -The demand curve shifts to the left if the determinant causes demand to drop. That means less of the good or service is demanded. That happens during a recession when buyers’ incomes drop. They will buy less of everything, even though the price is the same.

Detailed explanation-3: -Due to an increase in the price of petrol with constant price of cars, consumers would be less inclined to buy cars. This is a situation of decrease in the demand or a backward shift in the demand curve.

Detailed explanation-4: -When the prices of petrol and diesel are cut, the demand for cars is expected to rise, because car and petrol are complementary goods.