Tom and Jerry each drive up to a gas station.
Before looking at the price, each places an order.
Tom says,'I'd like 10 gallons of gas.'
Jerry says,'I'd like $10 worth of gas,'
What is each driver's price elasticty of demand?
Price eclasticity of demand TOP URGENT!!!!!
2008-10-15 6:16 am
回答 (2)
2008-10-16 11:04 pm
✔ 最佳答案
Tom says,'I'd like 10 gallons of gas' means whether the price level is, he will buy 10 gallons of gas, his demand curve is a vertical line. The price elasticity of demand is zero. Jerry says,'I'd like $10 worth of gas' means his total expenditure on the gas remains the same, whichever the price level is, therefore, his demand curve is a hyperbola with elasticity of demand equals to 1.
2008-10-16 11:20 pm
Tom is perfect inelastricity of demand. Based on his speech, he required to have 10 gallons of gas, so we can assume that doesn't matter how much it worht of, but he will still refill gas upto 10 gallons.
On the other hand, Jerry is prefect elastricity of demand, since doesn't matter how much per gallons, but he will pay $10 worth gas.
Wish it can help.
On the other hand, Jerry is prefect elastricity of demand, since doesn't matter how much per gallons, but he will pay $10 worth gas.
Wish it can help.
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