Short-run elasticity of demand for unleaded gasoline

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The short-run elasticity of demand for unleaded gasoline in the United States is estimated to be –0.54. With this in mind, the CEO of Texaco has decided to increase the price of Texaco’s unleaded gasoline by 5% in the U.S. markets. What do you predict will happen to Texaco’s total revenue from the sale of unleaded gasoline in the U.S.? Will total revenue rise, fall, or stay the same? Why?

Reference no: EM131166503

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