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A shortage occurred because gasoline producers were not willing to pay more for the oil used to stay current with the demand. As the supply level decreased, the demand for gasoline increased. People were waiting for hours at the pump to get gas and as people saw how scarce gasoline had become, they demanded it more...
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(Mankiw, 2004).
When taxes change, the equilibrium price will rise because of the decrease in overall supply and the increase in demand. In turn, this changes the quantity because gas is not a renewable resource. It is not sustainable; therefore, it will eventually run out. The more gasoline is demanded, the less gasoline will be available in the future...
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