Answer to Question #153841 in Microeconomics for Omasan

Question

Suppose it is announced that industry analysts are predicting that decreased oil supplies from Iraq will cause gasoline prices to rise, beginning next month. In the current week, the announcement would:

Answer 1

Suppose it is announced that industry analysts are predicting that decreased oil supplies from Iraq will cause gasoline prices to rise, beginning next month. In the current week, the announcement would shift the demand for gasoline right. With decreased oil supply, prices will go up, thus shifting the demand curve for gasoline towards the right.