Recently, gas prices have soared across the capital region. When the average gas price rose from $3.60 a gallon to $4.40 a gallon, the region observed a slight decrease in consumption of gasoline from 600 million gallons per year to 590 million gallons per year. Based on this information, what would you estimate that the price elasticity of demand is for gasoline in the Capital region? (The answer could be negative or positive and is not necessarily a whole number).
Recently, gas prices have soared across the capital region. When the average gas price rose from $3.60 a gallon to $4.40 a gallon, the region observed a slight decrease in consumption of gasoline from 600 million gallons per year to 590 million gallons per year. Based on this information, what would you estimate that the price elasticity of demand is for gasoline in the Capital region? (The answer could be negative or positive and is not necessarily a whole number).
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter3: Demand Analysis
Section: Chapter Questions
Problem 6E
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Recently, gas prices have soared across the capital region. When the average gas
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