The Price Elasticity of Demand for Gasoline Is 0

question 136

Multiple Choice

The price elasticity of demand for gasoline is 0.40. If the price of gasoline rises by 20 percent, there will be

• A) a decrease of more than 20 percent in the quantity of gasoline demanded.
• B) an increase in the total revenue received from the sale of gasoline.
• C) a loss of total revenue for gasoline producers, because at a higher price the quantity of gasoline demanded decreases.
• D) no change in the quantity of gasoline sold because people need gasoline.

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