home economics

posted by .

Suppose that 200 gallons of gasoline are demanded at a particular price. If the price drops by 1 percent, the quantity demanded of gasoline increases to 200.5 gallon. which of the following statement is true?
a) The elasticity of demand is equal to 0.5
b) Demand is elastic
c) Demand is enelastic
d)Demand is unit-elastic.
e)Demand is perfectly inelastic.

• Just plain "economics" -

Assistance needed

• home economics -

Gas consumption went up by .5 units or .25%. We say a good is inelastic if the elasticity is less than 1.00 (absolute value). Greater than 1 is elastic, equal to 1 is unit-elastic, Since 0.25%/1.00% is less than one, go with inelastic.

Similar Questions

1. economics

Identify three goods each for which your demand is (a) elastic or (b) inelastic. What accounts for the differences in elasticity?
2. Economics

As price falls along the elastic portion of a linear demand curve, _______ decrease while _______ increase. Answers. A. only price; quantity demanded , consumer surplus, and consumer expenditures B. consumer surplus and price; quantity …
3. economics

I know this might be basic.....but I am still not sure about subject of elasticity?
4. Managerial Economics

The coefficient of the price of gasoline in the regression of the quantity demanded of automobiles (in millions of units) on the price of gasoline (in dollars) and other variables is -14. (a) calculate the cross price elasticity of …
5. home economics

If the price elasticity is equal to 2, a 1percent increase in price will cause the quantity demanded to........from 200units to .......units
6. economics

1. Suppose that as the price of Y falls from \$3.00 to \$1.00 the quantity of Y demanded increases from 10 to 18. Compute the price elasticity of demand. Is the demand elastic or inelastic?
7. Economics

We're looking at the market for cat food. When the price is \$10, the quantity sold is 1000 bags. When the price drops 10%, the quantity sold increases 30%. Calculate the price elasticity of demand. (Answer in format X.XX, round to …
8. Economics

Consider the demand curve q = 100-2p. Starting from an initial price of 10, suppose the price increases by 5%. How much will the quantity demanded change by (in percent)?
9. Economics

17. The current price for a good is \$20, and 100 units are demanded at that price. The price elasticity of demand for the good is -1. When the price of the good drops by 10% to \$18, consumer surplus: Increases or decreases by \$__?
10. Economics

Suppose the price elasticity of demand for a novel translated into English is perfectly inelastic. Assume the initial price of the novel is \$24 and the quantity demanded is 222 copies per year. If the price of the novel increases by …

More Similar Questions