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31 October, 13:13

The demand for gasoline in the short run is A. elastic because people can easily switch to public transportation. B. perfectly inelastic because people have no choice but to buy gasoline. C. unit elastic because people tend to consume a stable amount of gasoline per period. D. inelastic because there are no good substitutes for gasoline.

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  1. 31 October, 13:15
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    The correct answer is option D.

    Explanation:

    The price elasticity of demand shows the degree of change in quantity demanded due to change in the price level. Perfectly inelastic demand means that an increase in the price causes no changes in the quantity demanded of the commodity. The demand curve, in this case, is a vertical line.

    The demand for gasoline will be inelastic because gasoline does not have any good or close substitute. So even if its price increases people have no choice but to purchase it. So change in price does not affect the quantity demanded.
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