ECONOMICS
SUPPLY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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gasoline prices are currently very high
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there is no widely available substitute fuel for cars
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gasoline uses a small portion of a person’s income
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people have already cut back their driving to a minimum
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Detailed explanation-1: -Demand for gasoline is inelastic because there are no substitutes available. The number of substitutes available has hurt the business of the United States Postal Service.
Detailed explanation-2: -There are many reasons that can make demand for a good inelastic. With gasoline, there are few substitute goods–a good that, if consumed, can reduce the consumption of another good.
Detailed explanation-3: -The amount of gas Americans buy has historically been pretty inelastic, meaning it doesn’t change that much when prices go up. That inelasticity has relied on a couple of things Americans have always done, according to DTN senior market analyst Troy Vincent: drive to the store to get groceries and drive to work.
Detailed explanation-4: -Answer and Explanation: The less sensitive demand is to changes in price, the less elastic a good is. This means that if the demand for a product is not affected by an increase in price is call a low elasticity of demand. Having a low elasticity of demand is known as inelastic demand.
Detailed explanation-5: -commodities that are used together for the fulfillment of a specific want are termed as complementary goods. This means cars and gasoline are complementary goods.