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https://www.mathxl.com/Student/playerHomework aspx?homeworkld 216901647&questionld; 1&flushede; false Bidde27 luke castellano 10/11/14 Homework: Chapter 5 Text Problem 8 6 of 20 complete Assignment score: 25% (5 of 20 pts) Exercise Score: 0 of 1 pt Studies have fixed the short-run price elasticity of demand for gasoline at the pump at -0.20. suppose decreases lead to a sudden cutoff of crude oil supplies As Us of refined gasoline drop and the quantity demanded by 45 percent. If gasoline were selling for S2.00 per alon before the cutoff what new price would you expect to see in the coming months? (Hint: Use the absolute value of the g treat all values as positive) gasoline elasticity coefficient and The price of gasoline will be s per gallon (Enter your response rounded to two decimal places.)

Explanation / Answer

-0.2=0.45/(2-p)

2-p=-2.25

p=$4.25

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