Question

Provide three reasons why the supply of gasoline would expand(supply curve would shift to the right)

Provide three reasons why the supply of gasoline would expand(supply curve would shift to the right)

Homework Answers

Answer #1
  • A decrease in price of crude oil increases the supply of gasoline. As the prices of raw materials decreases, the price of the final goods can be reduced. A reduced price will increase the supply of that product.
  • The reduced tax imposed by the government on the gasoline will increase the supply. The subsidies given by the government can decrease the price of gasoline and this will result in an increased supply.
  • when there is an increase in number of suppliers, a rightward shift in supply curve can be seen. Along with the number of suppliers increases, the supply of gasoline also increases.
  • Another important factor influencing the increased supply of gasoline is that it always has high demand. Gasoline is used for making fuels for all type of locomotives including cars, two wheelers, aeroplanes etc. So it has high supply and demand.
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