The price elasticity of demand for gasoline is estimated to be -0.2. Two million gallons are sold daily at a price of $1...
The price elasticity of demand for gasoline is estimated to be -0.2. Two million gallons are sold daily at a price of $1.
a. Find the demand function for gasoline, assuming it is linear, with gasoline measured in millions of gallons.
b. Graph the demand curve.
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The price elasticity of demand for gasoline is estimated to be -0.2. Two million gallons are sold daily at a price of $1...
The price-demand equation for gasoline is 0.6x + 2p = 85 where p is the price...
The price-demand equation for gasoline is 0.6x + 2p = 85 where p is the price per gallon in dollars and x is the daily demand measured in millions of gallons. A) Write the demand x as a function of price. x = Preview B) What is the demand if the price is $5 per gallon? x = millions of gallons Preview
1. a) Assume the long run elasticity of demand for gasoline is -0.2 and start with...
1. a) Assume the long run elasticity of demand for gasoline is -0.2 and start with the current California price of gasoline of $4.05 per gallon. How much would we need to increase the price in order to cut gasoline use in half in the long run? b) Explain in a few sentences why you would expect the short run effect of the tax to be much less. c) Suppose the income elasticity of demand for gasoline is 0.95. How...
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,...
At the beginning of this year, daily consumption of gasoline in the US amounted to 344 million gallons. It is es...
At the beginning of this year, daily consumption of gasoline in the US amounted to 344 million gallons. It is estimated that for every 10% increase in the price of gasoline, quantity demanded falls by 1.60 %. By the end of this year, the price of gasoline is expected to increase by 40 cents from $3.10 per gallon. Based on this information, what is the expected quantity demanded (QD) for gasoline at the end of this year? Please specify your...
0.2 (15 points) The following table shows the demand for gasoline by a public bus and...
0.2 (15 points) The following table shows the demand for gasoline by a public bus and the demand for gasoline by a private car. Price (per gallon) $3.2 $3.0 $2.8 $2.6 $2.4 $2.2 Demand for gasoline (per week) Quantity demanded: by a Quantity demanded: by a public bus (gallons) private car (gallons) 75 25 80 40 85 55 90 70 95 85 100 100 (a) Suppose the price of gasoline increases from $2.4 to $2.6. Calculate the price elasticity of...
the price elasticity of demand measures the responsiveness of the change in the
22. The price elasticity of demand measures the responsiveness of the change in the: A) quantity demanded to a change in the price. B) price to a change in the quantity demanded. C) lope re enterprise D) slope of the demand curve to a change in the quantity demanded. 23. The price of gasoline rises 5% and the quantity of gasoline purchased falls 1%. price elasticity of demand is equal to _______ and demand is described as _______ A) 0.2; inelastic B) 5; inelastic C) 0.2; elastic 24. For a...
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...
QUESTION 10 The price elasticity of demand for gasoline is -0.25. If we expect the price...
QUESTION 10 The price elasticity of demand for gasoline is -0.25. If we expect the price of gasoline to increase by 8 percent, what is the expected change in the quantity of gasoline demanded? A. Quantity declines by 2 percent B. Quantity declines by 8 percent C. Quantity increases by 2 percent D. Quantity declines by 4 percent QUESTION 11 The income elasticity of demand for bananas is -0.1. Is this good normal or inferior? A. Normal B. Neither normal...
8. In March 2002 the retail price of gasoline was S1.19 per gallon-exactly the same as...
8. In March 2002 the retail price of gasoline was S1.19 per gallon-exactly the same as it was in August 1990. Yet total gasoline production and consumption rose from 6.6 million gallons per week in 1990 to 8.7 million gallons per week in 2002. Using the graph below, draw the appropriate shifts in the demand and supply curves to explain these two phenomena Price (S/gallon) S1990 D1990 Millions of gallons/week
The price-demand equation for gasoline is 0.6x + 2p = 85 where p is the price per gallon in dollars and x is the daily demand measured in millions of gallons. A) Write the demand x as a function of price. x = Preview B) What is the demand if the price is $5 per gallon? x = millions of gallons Preview
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,...
At the beginning of this year, daily consumption of gasoline in the US amounted to 344 million gallons. It is estimated that for every 10% increase in the price of gasoline, quantity demanded falls by 1.60 %. By the end of this year, the price of gasoline is expected to increase by 40 cents from $3.10 per gallon. Based on this information, what is the expected quantity demanded (QD) for gasoline at the end of this year? Please specify your...
0.2 (15 points) The following table shows the demand for gasoline by a public bus and the demand for gasoline by a private car. Price (per gallon) $3.2 $3.0 $2.8 $2.6 $2.4 $2.2 Demand for gasoline (per week) Quantity demanded: by a Quantity demanded: by a public bus (gallons) private car (gallons) 75 25 80 40 85 55 90 70 95 85 100 100 (a) Suppose the price of gasoline increases from $2.4 to $2.6. Calculate the price elasticity of...
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...
8. In March 2002 the retail price of gasoline was S1.19 per gallon-exactly the same as it was in August 1990. Yet total gasoline production and consumption rose from 6.6 million gallons per week in 1990 to 8.7 million gallons per week in 2002. Using the graph below, draw the appropriate shifts in the demand and supply curves to explain these two phenomena Price (S/gallon) S1990 D1990 Millions of gallons/week
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