Question

All else constant a large decrease in the number of people who want to own a sport utility vehicle because of their poor fuel efficiency could be expected to cause_________.

Answer 1

Answer:

c) a decrease in the equilibrium price of gasoline

Explanation:

Since SUVs and gas are complementary goods, the relation between these two in the example is evident. Since the demand of SUVs decreases, the demand for its complimentary good will also decrease, as it has little to no use without the SUV.

As a consequence, the price of gasoline will decrease, as the demand decreases.