Circle the letter associated with the correct answer and write the correct letter on the line (and use corresponding online answer key to submit youranswers..make sure you read the associated questions and responses).The following data for gasoline sales and prices at a Slurpico Station in West Valley, Washington are from the United StatesDepartment of Energy. Prices are in dollars and sales are in gallons per day and driven by the quantity of gallons demanded:Sales330340350360370380390400410420430Price3.503.253.002.752.502.252.001.751.501.251.00Compute the price elasticity of demand when the price increases from $3.00 to $3.25 and determine what type of productgasoline is: (hint: use the midpoint method)а.FormulaCalculationAnswerPrice elasticity of demand for gasoline isCompute the price elasticity of demand when the price increases from $1.25 to $1.50 and determine what type of productgasoline is: (hint: use the midpoint method)b.FormulaCalculationAnswerPrice elasticity of demand for gasoline isWhen average gas prices are $1.50 a gallon, what does total revenue per day equal (remember, total revenue equals pricetimes quantity)?С.FormulaCalculationAnswerd.When average gas prices are $3.00 a gallon, what does total revenue per day equal?FormulaCalculationAnswerBased on your results from a, b, c, and d, above, gasoline is considered an(choose "inelastic" or "elastic")е.good, and if Slurpico continues to raise the price of its gasoline, its total revenue will(choose either "rise," "fall," or"stay the same.")

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Answered: The following data for gasoline sales…

Economics Today and Tomorrow, Student Edition

1st Edition

ISBN:9780078747663

Author:McGraw-Hill

Publisher:McGraw-Hill

Chapter5: Buying The Necessities

Section: Chapter Questions

Problem 20AA

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Suppose we know that the price elasticity of demand for organic carrotsis −1.5. If a grocer decreases the price of organic carrots by 12%,what would we expect to happen to the quantity of organic carrotspurchased?(a) Decrease by 18%(b) Decrease by 6%(c) Increase by 6%(d) Increase by 8%(e) Increase by 18%
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