If there is an increase in price of petrol, there would be a movement along the demand curve and a smaller quantity would be bought.
Liquidated Damages: These types of damages are awarded when there is a provision in a contract which states the amount of damages that shall be awarded in the event of a breach. Liquidated damages cannot be used as punishment to a party or to harm the party for the breach.
Such losses are generally not compensated by damages under contract law. However, they can be compensated if: 1  They result from physical inconvenience caused by the breach of contract. 2  The entire purpose of the contract was to provide enjoyment, a freedom from distress etc (ie, cruises and holidays).