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

 

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.