Calculate the price elasticity of demand for gasoline in California.
As Gas Costs Soar, Buyers Flock to Small Cars
Faced with high gas prices, Americans are substituting smaller cars for SUVs. In April 2008, Toyota Yaris sales increased 46 percent and Ford Focus sales increased 32 percent from a year earlier. SUVs sales decreased 25 percent in 2008 and Chevrolet Tahoe sales fell 35 percent. Full-size pickup sales decreased 15 percent in 2008 and Ford F-Series pickup sales decreased by 27 percent in April 2008. The effect of a downsized vehicle fleet on fuel consumption is unknown. In California in January 2008, gasoline consumption was 4 percent lower and the price of gasoline 30 percent higher than in January 2007.