Two drivers-Kevin and Maria-each drive up to a gas station. Before looking at the price, each places an order. Kevin says, "I'd like 10 gallons of gas." Maria says, "I'd like $10 worth of gas."

Who's statement is elastic?

Question

Business

Manuel Maxwell

26 January, 01:00

Two drivers-Kevin and Maria-each drive up to a gas station. Before looking at the price, each places an order. Kevin says, "I'd like 10 gallons of gas." Maria says, "I'd like $10 worth of gas."

Who's statement is elastic?

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Answers (1)

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Melina Santana · Answer 1

Answer: Maria's statement is elastic

Explanation: Only Maria's statement is elastic. Demand is said to be elastic when the computed elasticity is greater than 1. This indicates a high responsiveness to changes in price. Maria requires $10 worth of gas irrespective of the amount she'd be given for it. As a result her expenditure on gas is fixed and has no effect on expected revenue which shows that her elasticity is equal to one. A proportionate decrease in demand would cause a proportionate increase in price.

Two drivers-Kevin and Maria-each drive up to a gas station. Before looking at the price, each places an order. Kevin says, "I'd like 10 gallons of gas." Maria says, "I'd like $10 worth of gas." Who's statement is elastic?

Two drivers-Kevin and Maria-each drive up to a gas station. Before looking at the price, each places an order. Kevin says, "I'd like 10 gallons of gas." Maria says, "I'd like $10 worth of gas."

Who's statement is elastic?