Suppose that the long-run price elasticity of demand for gasoline is 0.55. Assume that the price of gasoline is currently 4.00 per gallon, the quantity of gasoline is 140 billion gallons per year, and the federal government decides to increase he excise tax on gasoline by $1.00 per gallon. Suppose that in the long run the price of gasoline increases by $0.70 per allon after the $1.00 excise tax is imposed. . Using the midpoint formula, after the tax is imposed, the new quantity of gasoline demanded is ear. (Enter your response rounded to two decimal places.) billion gallons per

Suppose that the long-run price elasticity of demand for gasoline is 0.55. Assume that the price of gasoline is currently 4.00 per gallon, the quantity of gasoline is 140 billion gallons per year, and the federal government decides to increase he excise tax on gasoline by $1.00 per gallon. Suppose that in the long run the price of gasoline increases by $0.70 per allon after the $1.00 excise tax is imposed. . Using the midpoint formula, after the tax is imposed, the new quantity of gasoline demanded is ear. (Enter your response rounded to two decimal places.) billion gallons per

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter19: Elasticity

Section: Chapter Questions

Problem 4QP

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