2023 Step 1 Analyze gasoline price hike statistics in the following scenario In June 2008 the U S retail | Assignments Online

2023 Step 1 Analyze gasoline price hike statistics in the following scenario In June 2008 the U S retail | Assignments Online

Assignments Online 2023 Business & Finance

 

Step 1 Analyze gasoline price hike statistics in the following scenario.

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 that time, the total quantity of gasoline purchased fell by 3%.
  • Supplies of gasoline produced also decreased from 1 million barrels to 800,000 barrels.
  • No viable substitute has been created to replace gasoline.

Step 2 Calculate the price elasticity of gasoline.

In a one- to two-page (250–500-word) paper, address the following. Be sure to show all work.

  • Calculate the price elasticity of demand for gasoline.
  • Calculate the elasticity of supply using the information provided.
  • Calculate the changes in consumer and producer surplus.
  • Because there is no viable substitute for gasoline at this time, what can you say about the cross-elasticity and income elasticity of supply and demand for gasoline?
  • Is the demand for gasoline elastic, inelastic, perfectly elastic or inelastic, or unit elastic?

Use the following as a guide for your calculations:

  • Use Microsoft Equation Editor or a similar tool to help you insert mathematical equations and symbols in your response. For further assistance, download theMicrosoft Equation Editor Information.
  • To show your work, clearly identify each step in your problem-solving process demonstrating your progress at each stage.
  • Clearly identify your final answer.

Step 3 Save and submit your assignment.

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