Find consumer present consumption

Reference no: EM1370283

Let P = 53-Q be a consumer's long-run (inverse) demand curve for gasoline, and P= 103-2Q be the consumer's short-run (inverse) demand curve, where P is the price of gasoline in dollars, and Q is gallons consumed per month. Given this:

(a)What is the consumer's present consumption of gasoline per month, given the current price is $3.0 per gallon?

(b)What is the consumer's short-run demand elasticity for gasoline, evaluated at the current price and consumption level?

(c)What is the consumer's short-run consumption level for gasoline if a tax is imposed which raises the price of gasoline to $3.50 per gallon?

(d)What is the consumer's long-run demand elasticity for gasoline, evaluated at the current price and consumption level?

(e)What is the consumer's long-run consumption level, if a tax is imposed which raises the price of gasoline rises to $3.5 per gallon?

Reference no: EM1370283

Questions Cloud

Explain how to retrieve certificates from directory : Retrieving certificates from the directory, having no directory but having each principal responsible for keping its own certificate, and sending it to someone who needs to talk to it?"

Explain how about the impact of a merger on customers : Explain How about the impact of a merger on customers and What would the determinants of supply suggest would happen?

Computation process for optimal output : Allied company machines produces the output that it sells in the highly competitive market at the price of $100 per unit. Its inputs include two machines (which cost the firm $50 each) and workers

Design strategies paper : Evaluate if the design strategy is being applied to address an organizational strategy, process, product, or service problem.

Find consumer present consumption : Let P = 53-Q be a consumer's long-run demand curve for gasoline, and P= 103-2Q be the consumer's short-run demand curve,

Explain if an investment does not fit with an organization''s : Explain If an investment does not fit with an organization's strategic plan and it is probably not a good idea, even if the net present value is positive.

Isoquant-isocost diagram : Employ an isoquant and isocost diagram and words to show how firms will respond to the decrease in the wage rate. Be sure to identify the short run scale effect and the long run substitution effect.

Create time algorithm-minimum time required to finish task : Create the O(|V | + | E |) time algorithm which, given times ti and the dependencies, determines minimum time required to complete all the tasks.

Solve for the overall equilibrium : Suppose that the interest rate is determined by; M/P=d1Y-d2i, where P is the price level, Y is real GDP and M/P is real money stock,

User Account

All Pages