to think about the wider impact of Hurricane Katrina on supplyand demand, let\'s

Question

to think about the wider impact of Hurricane Katrina on supplyand demand, let's consider the market for gasoline in Colorado, astate far enough from Louisiana that it is not immediately affectedby disruptions in oil infrastructure. The following graph shows thesupply and demand for gasoline in Colorado. The curves D1 and S1show the demand and supply of gasoline in Colorado on an averageday in late summer. The supply curve is vertical because on anygiven day, the amount of gasoline already delivered to gas stationsis fixed.

Explanation / Answer

I would say B,

because it is said that S1 and D1 are gasoline on an average day, so the equilibrium of gasoline on an average day would have to be $2.00.

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