The Price Elasticity of Demand for Gasoline in the Short

question 285

Essay

The price elasticity of demand for gasoline in the short run has been estimated to be 0.4.If a war in the Middle East causes the price of oil (from which gasoline is made) to increase, how will that affect total revenue from gasoline in the short run, all other things unchanged?
A.Quantity demanded will stay the same; total revenue will fall.
B.Quantity demanded will decrease; total revenue will rise.
C.Total revenue will remain unchanged.
D.Demand will not change; total revenue will rise.

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Definitions:

Major Depression

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Selective Serotonin Reuptake Inhibitors

A class of drugs commonly prescribed for depression and anxiety disorders, which work by increasing serotonin levels in the brain.

Nausea

A feeling of sickness with an inclination to vomit, which can be a symptom of numerous conditions or reactions.

Medication

Substances used to treat or prevent disease or relieve pain, often prescribed by healthcare professionals.