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

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Running head: PRICE ELASTICITY OF GASOLINE 1 Price Elasticity of Gasoline Gina Giramonti Indiana Wesleyan University
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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
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  • Spring '16
  • jolly beyioku

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