Let Ed_GI refer to the Income Elasticity for Gasoline

question 27

Multiple Choice

Let Ed_GI refer to the income elasticity for gasoline.Suppose Ed_GI= 2; then this means that if income

• A)increases by 2 percent,Qd_G will increase by 1 percent.
• B)decreases by 1 percent,Qd_G will decrease by 2 percent.
• C)increases by $1,Qd_G will decrease by 2 percent.
• D)decreases by 2 percent,Qd_G will decrease by 1 percent.

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Definitions:

Sales Mix

refers to the composition of different products or services sold, impacting overall sales and profitability.

Fixed Expenses

These are expenses that remain constant regardless of the amount of goods produced or sold, including items like rent, wages, and insurance premiums.

Selling Price

The amount of money for which a product or service is sold to customers.

Variable Labor Cost

Costs for labor that change in proportion to the level of production or sales in a company.