The speaker has just made a key point. The global middle class will double in the coming years. However, this new middle class r
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Answer:
They all help explain the downsloping demand curve
Explanation:
The options to the question wasn't provided. The complete question can be in the attached image.
The demand curve slopes downward from left to right. This indicates that the higher the price, the lower the quantity demanded and the lower the price, the higher the quantity demanded.
Income effect is a change in quantity demanded when real income change. Quantity demanded increases when real income increases and decreases when real income falls.
Substitution effect says that consumers would substituite to the consumption of a cheaper good when the price of a good originally consumed increases.
Diminishing marginal utility states that as consumption increases, utility derived from consumption falls and quantity demanded falls.
I hope my answer helps you
Answer:
4.545
Explanation:
Given:
Six months ago, the price of gasoline was $2.20 per gallon.
Now, the price is $2.40 per gallon.
In response to this price increase, the number of gallons of gasoline purchased has declined by 2 percent.
Question asked:
Based on this information, what is the absolute price elasticity of demand for gasoline?
<u>Solution:</u>
As we know:
Price elasticity of demand =
( given)
Price elasticity of demand =
Thus, the absolute price elasticity of demand for gasoline is 4.545