Assume that the price of a gallon of gas doubles overnight and is expected to remain...
Assume that the price of a gallon of gas doubles overnight and is expected to remain that high. What do you do in the immediate future? What do you do in a year or two from now? What does this tell you about your price elasticity of demand for gasoline
Homework Answers
Ans. In the immediate future , I'll try to use my vehicles efficiently so as to consume minimum fuel and thus would be trying to save the fuel. In long Run , I'll be looking for other alternatives like : Car Pools , Public Transport etc in order to save money. This clearly tells us that Elasticity of Demand for gasoline is Relatively Inelastic and we would continue demanding it even if prices rise but we'll then use it judiciously.
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Assume that the price of a gallon of gas doubles overnight and
is expected to remain...
Suppose that the long-run price elasticity of demand for gasoline is 0.40. Assume that the price ...
Suppose that the long-run price elasticity of demand for gasoline is 0.40. Assume that the price of gasoline is currently $4.00 per gallon, the quantity of gasoline is 140 billion gallons per year, and the federal government decides to increase the excise tax on gasoline by $1.00 per gallon. Suppose that in the long run the price of gasoline increases by $0.70 per gallon after the $1.00 excise tax is a. Using the midpoint formula, after the tax is imposed,...
9. The average price of gasoline in Texas in January 2018 was about $2.248/gallon and the...
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Suppose that the long-run price elasticity of demand for gasoline is -0.45. Assume that the price...
Suppose that the long-run price elasticity of demand for gasoline is -0.45. Assume that the price of gasoline is currently $4.00 per gallon, the quantity of gasoline is 140 billion gallons per year, and the federal government decides to increase the excise tax on gasoline by $1.00 per gallon. Suppose that in the long run the price of gasoline increases by $0.60 per gallon after the S1.00 excise tax is imposed. a. Using the midpoint formula, after the tax is...
Suppose that the long-run price elasticity of demand for gasoline is 0.45. Assume that the price...
Suppose that the long-run price elasticity of demand for gasoline is 0.45. Assume that the price of gasoline is currently $4.00 per gallon, the quantity of gasoline is 140 billion gallons per year, and the federal government decides to increase the excise tax on gasoline by $1.00 per gallon. Suppose that in the long run the price of gasoline increases by $0.60 per gallon after the $1.00 excise tax is imposec. a. Using the midpoint formula, after the tax is...
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At a price of $2.97 a gallon, Joe buys 40 gallons of gas a month. When...
At a price of $2.97 a gallon, Joe buys 40 gallons of gas a month. When the price of gas increases to $3.42 a gallon, Joe buys 36 gallons a month. What is his price elasticity of demand for gas?
Cal Overhaut operates an ExxonMobil gas station franchise in Fitzhugh, MD. The price of gasoline is...
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Cal Overhaut operates an ExxonMobil gas station franchise in Fitzhugh, MD. The price of gasoline is...
Cal Overhaut operates an ExxonMobil gas station franchise in Fitzhugh, MD. The price of gasoline is volatile and varies greatly from day to day. The price per gallon varies based on the seasonal blend of gasoline, which is determined by clean-air requirements, and Cal's pricing choices are limited to the profit margin for his price. Base price of unleaded regular delivered in New York harbor (Sept 2018 060 Added cost to Cal: 0.335 0.184 0.090 0.030 He recently raised the...
Assume that the current price for gasoline is $1.30 a litre, and at that price the...
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The average price of gasoline in Texas in the first week of January 2019 was about...
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Suppose that the long-run price elasticity of demand for gasoline is 0.40. Assume that the price of gasoline is currently $4.00 per gallon, the quantity of gasoline is 140 billion gallons per year, and the federal government decides to increase the excise tax on gasoline by $1.00 per gallon. Suppose that in the long run the price of gasoline increases by $0.70 per gallon after the $1.00 excise tax is a. Using the midpoint formula, after the tax is imposed,...
Suppose that the long-run price elasticity of demand for gasoline is -0.45. Assume that the price of gasoline is currently $4.00 per gallon, the quantity of gasoline is 140 billion gallons per year, and the federal government decides to increase the excise tax on gasoline by $1.00 per gallon. Suppose that in the long run the price of gasoline increases by $0.60 per gallon after the S1.00 excise tax is imposed. a. Using the midpoint formula, after the tax is...
Suppose that the long-run price elasticity of demand for gasoline is 0.45. Assume that the price of gasoline is currently $4.00 per gallon, the quantity of gasoline is 140 billion gallons per year, and the federal government decides to increase the excise tax on gasoline by $1.00 per gallon. Suppose that in the long run the price of gasoline increases by $0.60 per gallon after the $1.00 excise tax is imposec. a. Using the midpoint formula, after the tax is...
At a price of $2.97 a gallon, Joe buys 40 gallons of gas a month. When the price of gas increases to $3.42 a gallon, Joe buys 36 gallons a month. What is his price elasticity of demand for gas?
Cal Overhaut operates an ExxonMobil gas station franchise in Fitzhugh, MD. The price of gasoline is volatile and varies greatly from day to day. The price per gallon varies based on the seasonal blend of gasoline, which is determined by clean-air requirements, and Cal's pricing choices are limited to the profit margin for his price Base price of unleaded regular delivered in New York harbor (Sept 2018) Added cost to Cal: Maryland state gasoline tax Federal gasoline tax Delivery Advertising...
Cal Overhaut operates an ExxonMobil gas station franchise in Fitzhugh, MD. The price of gasoline is volatile and varies greatly from day to day. The price per gallon varies based on the seasonal blend of gasoline, which is determined by clean-air requirements, and Cal's pricing choices are limited to the profit margin for his price. Base price of unleaded regular delivered in New York harbor (Sept 2018 060 Added cost to Cal: 0.335 0.184 0.090 0.030 He recently raised the...
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