The Department of Energy (DOE) projects that the price of electricity, adjusted

Question

The Department of Energy (DOE) projects that the price of electricity, adjusted for inflation, will remain roughly flat for the next 25 years. Meanwhile the price of gasoline, adjusted for inflation, is expected to rise by about 50 percent a) If the DOE is right, the demand for electric cars is ikely to increase. O not change. O decrease. b) The DOE projection assumes that the amount of electricity generated from ren resources such as solar power will rise about 75 percent over the next 25 years. Suppose that the price of oll soars, so that utlities close their ol powered generators and decide to invest even more in renewable energy That is likely to raise the price of electicity f renewable sources have a lower cost. O not change the price of electricity. lower the price of electricity if renewable sources have a lower cost.

Explanation / Answer

Demand for electric cars will rise because relatively the price of fuel for these cars which is electricity is not going to increase while gasoline price will rise. Hence correct option is Increase

This will reduce the price of electricity if resource cost is lower. This is because increased production of electricity will increase the supply and so prices will fall. Correct option is lower the price if resource cost is lower.

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