3. An increase in gasoline prices from 2.1 Dhs to 2.5 Dhs per litre resulted in a decrease of automobile use from 950,000 to 920,000 trips. Estimate the likely impact of an increase in gasoline price from 2.5 Dhs to 3.0 Dhs. Solve this problem using the three alternative measures of elasticity.
3. An increase in gasoline prices from 2.1 Dhs to 2.5 Dhs per litre resulted in a decrease of automobile use from 950,000 to 920,000 trips. Estimate the likely impact of an increase in gasoline price from 2.5 Dhs to 3.0 Dhs. Solve this problem using the three alternative measures of elasticity.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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