csteward8363 csteward8363

25-07-2022
Business

contestada

Suppose that a 20% increase in the price of gasoline causes a 5% decrease in the consumption of gasoline and a 30% drop in the sales of SUVs. What can you say about elasticities?

Respuesta :

ewomazinoade ewomazinoade

05-08-2022

The elasticity of demand for gasoline is inelastic.

The cross price elasticity of gasoline and SUVs is negative.

What is the elasticity of demand and cross price elasticity?

Price elasticity of demand measures the responsiveness of quantity demanded to a change in price of the good. Price elasticity of demand is determined by dividing the percentage change in quantity demanded for a good by the price of that good.

Demand is inelastic if a small change in price has little or no effect on quantity demanded. The absolute value of elasticity when demand is inelastic would be less than one

Price elasticity of demand = percentage change in quantity demanded / percentage change in price

5% / 20% = 0.25

Cross price elasticity of demand measures the responsiveness of quantity demanded of good A to changes in price of good B. . Cross price elasticity is used to determine if two goods are substitute goods or complement goods. If cross price elasticity of demand is negative, it means that the goods are complementary goods.

Cross - price elasticity = -30% / 20% =-1.5

To learn more about price elasticity of demand, please check: https://brainly.com/question/18850846

#SPJ1

Answer Link

Otras preguntas

Mr. Hawthorne (learned, taught) me the proper way to (rise, raise) the flag. *

Political action committees were created as a result of ______. Question 26 options: a) weaknesses among local Republican parties in the Deep South b) interest

The probability that a student uses Smarthinking Online Tutoring on a regular basis is 0.31 . In a group of 21 students, what is the probability that exactly 5

alan repairs televisons. His revenue is modeled by the function r(h)=47+2h for every h hours he spends repairing televisions. His overhead cost is modeled by th

Over the past 60 years, the levels of carbon dioxide in the atmosphere has been continually increasing. MAny scientists hypothesized that the increase has led t

1)Describe the industrial Manufacture ofammonia2)Describe the physical and chemical PropertiesOF ammonia3)Describe uses of ammonia4)Dedcribe the Manufacture of

A 30 g particle is undergoing simple harmonic motion with an amplitude of 2.0 ✕ 10-3 m and a maximum acceleration of magnitude 8.0 ✕ 103 m/s2. The phase constan

Your teacher is giving out fruit for lunch. A paper bag contains 4 apples, 6 pears, and 8 oranges. What is the probability you will pick an orange at random?

Find the value of each variable in each parallelogram.

Suppose that nominal GDP increased in Econland from $10 Billion to $12 Billion (what is that percentage change? You will need to figure that out to answer the r