Homework Answers
Ans: 130.55 billion gallon
Explanation:
Here, Ed = -0.45 [the
absolute value is 0.45]
original price = $4
New price = $4.60
% increase in price = (0.60 / 4) * 100 = 15%
So, % decrease in quantity demanded = 0.45 * 15% = 6.75%
Original quantity demanded = 140 billion gallon
New quantity demanded = 140 - (0.0675 * 140) = 130.55 billion gallon
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