Question

The price of gas doubles. At first, many people still purchase the same amount of gas. Eventually, people start making other choices, like carpooling and telecommuting, which in turn leads to a decrease in their consumption of gasoline. This is an example of which of the determinants of elasticity? substitutability proportion of income spent on a product time period luxuries versus necessities

Name: the price of gas doubles at first many people still purchase the same amount of gas eventually people start making other choices like carpooling and telecommuting which in turn leads to a de 58004
Uploaded: 2022-09-24T17:16:18-08:00
Duration: 1 min 16 s
Channel: Rashmi Sinha
Description: the price of gas doubles at first many people still purchase the same amount of gas eventually people start making other choices like carpooling and telecommuting which in turn leads to a de 58004

          The price of gas doubles. At first, many people still purchase the same amount of gas. Eventually, people start making other choices, like carpooling and telecommuting, which in turn leads to a decrease in their consumption of gasoline. This is an example of which of the determinants of elasticity?
substitutability
proportion of income spent on a product
time period
luxuries versus necessities

Added by Jack R.

Principles of Economics

Gregory Mankiw 8th Edition

Instant Answer

Solved by Expert Rashmi Sinha

09/24/2022

Step 1

This suggests that the proportion of income spent on gas is not a significant determinant of elasticity in this scenario, as people are willing to continue purchasing the same amount despite the price increase. Show more…

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The price of gas doubles. At first, many people still purchase the same amount of gas. Eventually, people start making other choices, like carpooling and telecommuting, which in turn leads to a decrease in their consumption of gasoline. This is an example of which of the determinants of elasticity? substitutability proportion of income spent on a product time period luxuries versus necessities