question 5 10 pts last summer, the price of gasoline increased by 20 percent and the quantity demanded of…

question 5 10 pts last summer, the price of gasoline increased by 20 percent and the quantity demanded of gasoline decreased by 5 percent. this indicates that the demand for gasoline is: elastic. unitary. inelastic. increasing.

question 5 10 pts last summer, the price of gasoline increased by 20 percent and the quantity demanded of gasoline decreased by 5 percent. this indicates that the demand for gasoline is: elastic. unitary. inelastic. increasing.

Answer

Brief Explanations:

The price of gasoline increased by 20 percent and the quantity demanded decreased by 5 percent. Price - elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in price. Here, the absolute value of the ratio of the percentage change in quantity demanded (5%) to the percentage change in price (20%) is less than 1, which indicates inelastic demand. Inelastic demand means that changes in price have a relatively small impact on the quantity demanded.

Answer:

Inelastic.