The Price Elasticity of Demand for Gasoline in the Short

question 142

Multiple Choice

The price elasticity of demand for gasoline in the short run has been estimated to be 0.1.If a war in the Middle East causes the price of oil (from which gasoline is made) to increase,how will that affect total expenditures on gasoline in the short run,all other things equal?

• A)Quantity demanded will stay the same,but total expenditures will fall.
• B)Quantity demanded will decrease a massive amount,but total expenditures will rise.
• C)Total expenditures will remain unchanged.
• D)Quantity demanded will not change much,but total expenditures will rise.

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