Question

"It wouldn't matter if you raised the price of gas to $5 per gallon, consumption of gas would not change, because people need gas. " Does this make any sense? Use a graph in your answer.

Answer 1

If the price of the gas increases , the demand for gas does not change. This is because in economics we have a more precise definition of demand. It is not only the quantity that people buy but actually it is schedule that shows the various quantities that consumers are willing and able to buy at various prices in a given time period, ceteris paribus.

Here , the price of gas raises to $5 per gallon , consumption would not change because people need gas and it is very basic necessity . According to me, it totally make sense because it can be one of the exception to the factors affecting the demand of the product . If the product is a basic necessity than its demand will be constant.

Price	Quantity Demanded
$3	10
$4	10
$5	10