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Provide two demand related and two supply related reasons why the equilibrium price of gasoline would...

Provide two demand related and two supply related reasons why the equilibrium price of gasoline would rise.
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Answer #1

Two demand related reasons are :

  • Increase in the income of people will increase the demand for the gasoline
  • A decrease in the price for cars will increase the demand for gasoline as they are complements.

Two supply related reasons are:

  • Environmental regulations like carbon tax can make the production costlier and increase the cost of gasoline
  • Decrease in the supply due to any internal strife in the middle east. like terrorism etc.
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