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Suppose the Price of Gasoline in July 2004 Averaged $0

question 80

Essay

Suppose the price of gasoline in July 2004 averaged $0.91 per litre and 15 million gallons a day were sold.In October 2005, the price averaged $1.06 per litre and 14 million gallons were sold.If the demand for gasoline did not shift between these two months, use the midpoint formula to calculate the price elasticity of demand.Indicate whether demand was elastic or inelastic.


Definitions:

Youthfulness

The characteristics, qualities, or appearance traditionally associated with young people.

Slightly Sarcastic

Describes a tone or manner of speaking that involves mild, playful sarcasm intended to amuse or tease without causing harm.

Commutation

The action of substituting one thing for another or the process of changing a penalty to a less severe one.

Family Life Cycle

A series of stages through which a family typically progresses, such as marriage, childbirth, upbringing of children, and the eventual departure of adult children from the home.

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