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Real World Analysis - Week 2 - Denise Seals

Real World Analysis - Week 2 - Denise Seals - Name Denise...

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Name: Denise Seals Email: [email protected] Title: What’s the Price Elasticity of Demand for Gasoline? (Hint: It isn’t zero) Citation: (Moffatt,2009) ______________________________________________________________________ My Reasons for Selecting this Article The reason I selected this article is the ongoing theme of elasticity of demand in the microeconomics book. I also felt gas prices continue to be a problem and questioned by the public since the vast increase in price in the summer of 2008. The Author(s) Main Points The rise in price in gasoline will not change people behavior. The public may not like it but, the increase in price will not make people stop driving to work, quit their jobs or sell their house to compensate for the increase in price. There is no need to theorize about how people may respond to the gas hikes, based on meta-analyses we can determine what the price elasticity of demand for gas is. The expected difference between the effect of gas prices within 1 year or less (short-run) and the effect in gas prices in the long-run (over 1 year).
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