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Demand for gasoline in competitive market

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What effect should each of the following have on the demand for gasoline in a competitive market? State what happens to demand. Explain your reasoning in each case and relate it to a demand determinant.

(a) an increase in the number of cars

(b) the economy moves into a recession

(c) an increase in the price of car insurance, taxes, maintenance

(d) consumer expectations of substantial price increases in gasoline

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What effect should each of the following have on the demand for gasoline in a competitive market? State what happens to demand. Explain your reasoning in each case and relate it to a demand determinant.

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(a) Demand increases because there would be more buyers of gasoline. The additional buyers would come from the additional cars and trucks.

(b)Demand decreases because ...

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  • Bachelor of Science , Berea College
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