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Consider the following data from the gas station down the street from you for the last week of November: Nov 2018 Price per gallon: $2.79
Consider the following data from the gas station down the street from you for the last week of November: Nov 2018 Price per gallon: $2.79 Gallons sold: 12,500 Nov 2019 Price per gallon: $2.24 Gallons sold: 14,250
- Explain how you would calculate the price of elasticity of demand for gasoline in detail.
- Explain how consumer and producer surplus will change as a result of this price change in detail.
- Explain the elasticity of supply for gasoline. (If prices go up, how quickly would the supply of gasoline increase).
- Discuss whether you feel the demand for gasoline is elastic, inelastic, perfectly elastic, or unit elastic.
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