A journalist wrote the following about the effects of falling gasoline prices:

"With lower prices, demand rises and people consume more."

Source: Jeff Sommer, "Cheaper Oil, Fatter Wallets and a National Opportunity," New York Times , December 20, 2014. Briefly explain whether you agree with the journalist's analysis. The journalist's statement is

A. true because a decrease in the price of gasoline would result in an increase in quantity demanded , not an increase in demand , for gasoline.

B. true because a decrease in the price of gasoline would result in an increase in demand , not an increase in quantity demanded , for gasoline.

C. not true because a decrease in the price of gasoline would result in an increase in demand , not an increase in quantity demanded , for gasoline.

D. not true because a decrease in the price of gasoline would result in an increase in quantity demanded , not an increase in demand , for gasoline.

Question

Social Studies

Cassius Hurley

2 September, 11:35

A journalist wrote the following about the effects of falling gasoline prices:

"With lower prices, demand rises and people consume more."

Source: Jeff Sommer, "Cheaper Oil, Fatter Wallets and a National Opportunity," New York Times , December 20, 2014. Briefly explain whether you agree with the journalist's analysis. The journalist's statement is

A. true because a decrease in the price of gasoline would result in an increase in quantity demanded , not an increase in demand , for gasoline.

B. true because a decrease in the price of gasoline would result in an increase in demand , not an increase in quantity demanded , for gasoline.

C. not true because a decrease in the price of gasoline would result in an increase in demand , not an increase in quantity demanded , for gasoline.

D. not true because a decrease in the price of gasoline would result in an increase in quantity demanded , not an increase in demand , for gasoline.

+3

Answers (1)

Know the Answer?

Paul · Answer 1

The correct answer is option D.

Explanation:

With the decrease in the price of any commodity, take for instance gasoline, will cause an increase in the quantity demanded. This will be indicated by a downward movement on the same demand curve.

The demand is said to be increased if, at the same price level, the quantity demanded has increased.

So, here the journalist's statement is not true.