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Oil companies wouldn't go out of business if cars were able to get 100 MPG anyway. Gas prices would just go up.
Simple supply and demand.
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That's not how supply and demand works. Using the supply and demand model, price would only increase if demand was higher than supply. The increase in price would reduce demand to the point where it levels out with supply. If you reduce the demand, the price should go down as well.
That doesn't mean, however, that the oil companies won't just raise prices to increase profit.