Question

BICI DEL G H I Cal Overhaut operates an ExxonMobil gas station franchise in Fitzhugh, MD. The price of gasoline is volatile and varies significantly from day to day. The price per gallon varies based on the seasonal blend of gasoline, which is determined by clean-air requirements. Cal's pricing options are based on the desired profit margin. Base Addec Conventional Gasoline Regular Spot Prices can be found at https://www.eia.gov/dnav/pet/hist/EER EPMRU_PF4_Y35NY_DPGD.htm. Cal recently raised the price of regular gas by 1 cent per gallon from $2.749 to $2.759, and his profit declined. Cal would like you to explain why that happened. Total Cal competes with another gas station across the street that typically sells regular gas for 2 to 3 cents per gallon less than his station. They are currently selling gasoline for $2.729 per gallon. Recently, regular gasoline for delivery in New York harbor sold for $1.740 per gallon. Cal tells you that his gas station has fixed operating costs of about $250 per day. To the right are the components that determine the cost of a gallon of regular gasoline to Cal's business. mmm Answer the seven questions below. You are required to use Excel for all calculations. Answer Quant _ _ ZA The

please help with question 1. please answer question in table format. thank you

   the website that was posted in the scenario is attached showing the price of gas in ny harbor. please help with question 1. Thanks

Answer 1

Price elasticity of demand = % change in quantity / % change

in price

% change in quantity = (Change in quantity/original

quantity) * 100

= (3600-4000)/4000

=- 400/4000

= -10%

% change in price =(change in price/original price) * 100

=(2.759-2.749)/2.749

= 0.01/2.749

= 0.36%

Price elasticity of demand = -10/0.36

= -27.78%

Demand is relatively elastic.

Gallons sold per day	Price	Revenue	Cost per Gallon	Variable cost	Fixed cost Per day	Total cost	Daily profit
4000	2.749	10996	2.381	9524	250	9774	1222
3600	2.759	9932 (3600*2.759)	2.381	8572	250	8822 (8572+250)	1110 (9932-8822)

Revenue decreases by $1064 (10996-9932).

Daily profit decreases by $112 (1222-1110).