Question

Explain what would happen to either the supply curve, the demand curve, the price of gasoline and the quantity of gasoline traded at equilibrium if the following scenarios occurred. Provide a simple sketch of the appropriate shift in the appropriate curve.

1. If President Clinton (hypothetically speaking, of course) had required 30% of all vehicles to be electric in 2018, what would happen in the market for gasoline?

Answer 1

Due to the government mandate people will try to avail electric cars more and demand for gasoline driven cars would fall . So in the gasoline market the demand for gasoline will fall . The demand curve shifts leftwards causing both quantity and price to fall at equilibrium .