Log out Go to App
Go to App

Learning Materials

Features

Discover

Chapter 5: Q.7 (page 130)

What would the gasoline price elasticity of supply mean to UPS or FedEx?

Short Answer

Expert verified

The percentage change in quantity delivered due to a given percentage change in gasoline price.

Step by step solution

01

Definition

Price elasticity:

The ratio of the percentage change in quantity demanded of a product to the percentage change in price is known as price elasticity of demand. Economists use it to figure out how supply and demand change when the price of a product changes.

02

Explanation

Gasoline price elasticity to supply methods such as UPS or FedEx is the percentage change in quantity supplied as a result of a given percent change in gasoline price. The elasticity of gasoline costs in terms of providing delivery services to UPS or FedEx. Assume that apples have a cross-price elasticity of 0.4 to the price of oranges and that the price of oranges falls by 3%.

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Start your free trial

Over 30 million students worldwide already upgrade their learning with Vaia!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

Suppose the cross-price elasticity of apples with respect to the price of oranges is 0.4, and the price of oranges falls by 3%. What will happen to the demand for apples?

Under which circumstances does the tax burden fall entirely on consumers?

From the data in Table 5.5 about the demand for smartphones, calculate the price elasticity of demand from point B to point C, point D to point E, and point G to point H. Classify the elasticity at each point as elastic, inelastic, or unit elastic.

In a market where the supply curve is perfectly inelastic, how does an excise tax affect the price paid by consumers and the quantity bought and sold?

Why is the demand curve with constant unitary elasticity concave?
See all solutions

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.

Sign-up for free