Suppose the Demand for Large (And Therefore High-Gasoline Consumption) Cars

Multiple Choice

Suppose the demand for large (and therefore high-gasoline consumption) cars decreases sharply during an energy crisis. The most likely market adjustment would be

A) a sharp rise in the price of large cars in the short run as people rush to purchase these vehicles before producers cut back on manufacturing them.
B) a moderate increase in short-run prices, followed by a larger long-run price increase as the supply of large cars is depleted.
C) lower short-run prices, which will lead to an expansion in the number of large cars sold.
D) a decrease in the price of large cars in the short run, leading to a reduction in output, which will moderate the price decline in the long run.