Most Studies Show That the Price Elasticity of Demand for Gasoline

question 22

Multiple Choice

Most studies show that the price elasticity of demand for gasoline is -0.2. If the price elasticity of supply is 2, then a tax on gasoline will:

• A) have no effect on the market equilibrium price of gasoline.
• B) cause the market equilibrium price of gasoline to fall.
• C) cause the market equilibrium price paid by buyers to rise.
• D) cause the net price received by sellers to fall.
• E) both c and d

---

Definitions:

Search Properties

Characteristics of a product or service that can be easily evaluated before purchase, such as color, style, or price.

Tangible Products

Physical items or goods that can be seen, touched, and owned, unlike services which are intangible.

Social Marketing Tools

Platforms and applications that are used to promote products or services through social networks and digital channels, aiming to engage with a wider audience.

Blood Donations

The act of giving blood voluntarily which is then used for transfusions or made into medications for patients in need.