Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A product that is bought regularly by consumers that is almost a necessity is gasoline. Most consumers require a vehicle to get to important everyday

A product that is bought regularly by consumers that is almost a necessity is gasoline. Most consumers require a vehicle to get to important everyday events (work, school, shopping) but also use for leisure, so there will always be a demand. If the price of gas goes up, then demand will go down, shifting the demand curve left. If the price of gas goes down, then demand will go up shifting the demand curve right. The price of the product is inversely proportional to the demand. However, a change of income is a major factor affecting demand. Increased income would shift the demand curve to the right (higher demand). 


Find alternative means of traveling (like carpooling, public transportation, or walking - these are substitutes) to everyday events and may altogether eliminate leisure trips if the price of gas rises too much.

Step by Step Solution

3.40 Rating (153 Votes )

There are 3 Steps involved in it

Step: 1

Your analysis of gasoline demand is right on point Heres a breakdown of the key points Inelastic Dem... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Document Format ( 2 attachments)

PDF file Icon
663d8f3fb1eef_965391.pdf

180 KBs PDF File

Word file Icon
663d8f3fb1eef_965391.docx

120 KBs Word File

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Econometric Analysis

Authors: William H. Greene

5th Edition

130661899, 978-0130661890

More Books

Students also viewed these Economics questions

Question

Explain the three approaches by businesses to social responsibility

Answered: 1 week ago

Question

Explain the responsibilities businesses have to stakeholders

Answered: 1 week ago