Price Elasticity of Gasoline_2.3_Giramonti .docx - Running head PRICE ELASTICITY OF GASOLINE 1 Price Elasticity of Gasoline Gina Giramonti Indiana

# Price Elasticity of Gasoline_2.3_Giramonti .docx - Running...

• 4
• 100% (1) 1 out of 1 people found this document helpful

This preview shows page 1 - 3 out of 4 pages.

Running head: PRICE ELASTICITY OF GASOLINE 1 Price Elasticity of Gasoline Gina Giramonti Indiana Wesleyan University
PRICE ELASTICITY OF GASOLINE 2 Price Elasticity of Gasoline In June 2008, the U.S. retail gas price jumped from \$3 to \$4 a gallon. This is a 33% increase in price from January 2008. During this time, the total quantity of gasoline purchased fell by 3%. Supplies of gasoline produced also decreased from 1 million barrels to 800,000. No viable substitute has created to replace gasoline. There is a formula to follow to help calculate the price of elasticity of demand for gasoline. That form is minus the new price from the initial price, divide the answer from the initial. Once you have that answer then you multiply it by one hundred to get the percentage. The surplus will change as a result of this price increase because the surplus is influenced by multiple variables. If a supply of the product increases the consumer is likely to benefit from it, supply increases the consumer surplus will increase. If the price does down, then the consumer

#### You've reached the end of your free preview.

Want to read all 4 pages?

• Spring '16
• jolly beyioku

### What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern

Stuck? We have tutors online 24/7 who can help you get unstuck.
Ask Expert Tutors You can ask You can ask ( soon) You can ask (will expire )
Answers in as fast as 15 minutes