Casey's General Stores is a chain of convenience stores along with gas stations that was based in Ankey, IA and now has convenience marts all over the midwest. In small towns, there may only be 1 or two gas stations; however, in larger towns many gas stations compete with each other. One signature of gas stations is that prices per gallon are displayed on large signs making it easy for customers to compare prices and select the cheapest station. Many chains, like Casey's, have very loyal customers so when they have slightly higher prices, they don't lose all business. Suppose you are in charge of pricing products at a convenience store similar to Casey's in a larger town with a number of gas stations and convenience marts. You are provided with the elasticity and marginal cost information.

Using the markup rule, determine the price you should charge for each product.
Product	Price Elasticity	MC	Price
Gasoline	4.00	$2.10
Quarts of Oil	1.10	$0.50
Bottled Water	1.20	$0.25
Bottled Soda	1.50	$0.75
Ice Cream Bars	2.00	$1.00
Chips	2.25	$1.25
Cheeseburgers	2.75	$2.00
Pizza	3.00	$1.50
The price elasticity of demand for gasoline purchasedfrom your storeis high (as opposed to the gasoline as a good in the global market). Which of the following acceptable answers is the likely cause of this elasticity?
Gasoline from your store
What is the relationship between elasticity and the amount of markup a firm can place on a product?