Asked by Heather Weathers on Jul 08, 2024
Verified
The price elasticity of gasoline in the United States has been estimated to be 0.15.If this is so, should profit-maximizing gasoline stations raise their prices? (Explain why or why not.)
Gasoline
A flammable liquid derived from petroleum, used primarily as fuel in internal combustion engines.
- Understand price elasticity of demand and its implications for pricing strategies in competitive markets.
Verified Answer
AW
Alexis WiggerJul 09, 2024
Final Answer :
Individual station's price elasticities of demand are quite elastic because of competition between stations.
Learning Objectives
- Understand price elasticity of demand and its implications for pricing strategies in competitive markets.