You have been analyzing the gasoline industry for some time now.Your boss is the chiefoperating officer of Petrol Zoom, a major gasoline producer selling in the same market asExxon and British Petroleum (among others).You have made the following notes thatyou are about to present to him in your next meeting:

--change in quantity demanded for the total gasoline industry last month =+1 percent

--change in the average price of gasoline by the industry last month =-3 percent

--change in quantity demanded for Petrol Zoom last month =+2 percent

a)What can you conclude about consumer sensitivity of Petrol Zoom in relation to therest of the gasoline market?Why do you think this is the case?

b)Given the data you've researched, what pricing strategy would you recommend to theCOO of Petrol Zoom in order to improve the company's revenue picture?Explain.