If an oil pipeline shuts down in Alaska, how does that affect the market for gasoline?
demand increase, decrease
or
supply increase, decrease
If that pipeline shuts down, there will e a decrease in supply and then an increase in demand.
Sra
When an oil pipeline in Alaska shuts down, it has an impact on both the supply and demand of gasoline. Let me explain how it affects each of them:
1. Supply: The shutdown of an oil pipeline reduces the supply of crude oil, which is used as a raw material to produce gasoline. With less crude oil available, the overall supply of gasoline decreases. This reduction in supply can lead to an increase in gasoline prices.
2. Demand: The shutdown of an oil pipeline can also affect the demand for gasoline indirectly. Typically, when the supply of gasoline decreases, its price increases. As the price of gasoline rises, consumers may be less willing or able to purchase it in the same quantities as before. This decrease in demand can be observed as consumers search for alternatives to gasoline, such as carpooling or using public transportation.
Therefore, the shutdown of an oil pipeline in Alaska can lead to a decrease in the supply of gasoline and potentially an increase in its price. Consequently, it may also result in a decrease in demand as consumers respond to the higher prices.