Ask Question
BusinessBusiness
19 May, 03:15

Suppose the US demand curve for gasoline shifts rightward, and the U. S. supply curve for gasoline remains unchanged. As a result, the price of gasoline increases by 9 percent, and the equilibrium quantity increases by 3 percent. Which of the following statements is true based on this information? Show Work

A) The price elasticity of demand for gasoline is roughly 0.33.

B) The price elasticity of demand for gasoline is roughly - 3.

C) The price elasticity of supply for gasoline is roughly 0.33.

D) The price elasticity of supply for gasoline is roughly 3.

+2
Answers (1)
  1. 19 May, 05:15
    0
    Option (a) is correct.

    Explanation:

    Given that,

    Percentage increase in the price of gasoline = 9 percent

    Percentage increase in the quantity demanded = 3 percent

    Therefore, there is a rightward shift in the demand curve for gasoline and supply curve remains the same. Hence, we need to calculate only price elasticity of demand.

    So, the price elasticity of demand is calculated as follows:

    = Percentage increase in the quantity demanded : Percentage increase in the price of gasoline

    = 3 : 9

    = 0.33
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Suppose the US demand curve for gasoline shifts rightward, and the U. S. supply curve for gasoline remains unchanged. As a result, the ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
Which of the following is regulated by the FLSA? A. Affirmative action B. Health and safety procedures C. Labeling of food products D. Minimum wage
Answers (2)
Fredrick received a $1,400 loan from the bank for a new appliance. the bank is using the simple interest formula for this two-year, 8% loan. what is his total interest?
Answers (1)
A client has purchased a nonqualified variable annuity from a commercial insurance company. Before the contract is annuitized, your client, currently age 60, withdraws some funds for personal purposes.
Answers (1)
An app advertiser would want to use a third-party tracking company to:
Answers (1)
A company that uses a job order costing system would make the following entry to record the flow of direct materials into production:a. debit Work in Process Inventory, credit Cost of Goods Sold. b.
Answers (1)
New Questions in Business
Helena Fogarty does her own research and development for Mi Ola. When she goes out and talks to fellow surfers about their use and likes and dislikes of surfing swimwear in general to get inspiration for new products, she is in which of the
Answers (1)
Amanda invested a total of $3 comma 100 into three separate accounts that pay 4 % , 6 % and 7 % annual interest. Amanda has three times as much invested in the account that pays 7 % as she does in the account that pays 4 %.
Answers (1)
Mackery, Inc., has an outstanding issue of preferred stock that pays a $5.6 dividend every year. If this issue currently sells for $82.08 per share, what return to market investors require on it currently
Answers (1)
A researcher randomly assigns 50 students to two groups of 25. group 1 is given computers and educational software to take home and use, while group 2 is given educational workbooks to take home.
Answers (1)
Which type of distribution is used when the producer wants more than one, but fewer than all, of the intermediaries who are willing to carry its products? A. exclusive B. selective C. intensive D. administered E. corporate
Answers (1)
Home » Business » Suppose the US demand curve for gasoline shifts rightward, and the U. S. supply curve for gasoline remains unchanged. As a result, the price of gasoline increases by 9 percent, and the equilibrium quantity increases by 3 percent.
Sign Up Forgot Password?