At a price of $2.55 per gallon, the average weekly demand by consumers for gasoline is 43 gallons. If the price rises to $2.75, the weekly demand drops to 41 gallons. Assuming demand is linear, let
, where Q is the weekly quantity of gasoline demanded and p is the price per gallon. What is the slope m, along with its economic significance?
A) -0.40; if gasoline prices increase by $1 per gallon, then there will be a 0.40 gallon decrease in weekly demand.
B) -2; if gasoline prices increase by $1 per gallon, then there will be a 2 gallon decrease in weekly demand.
C) -10; if gasoline prices increase by $1 per gallon, then there will be a 10 gallon decrease in weekly demand.
D) -0.20; if gasoline prices increase by $1 per gallon, then there will be a 0.20 gallon decrease in weekly demand.

Question

At a price of $2.55 per gallon, the average weekly demand by consumers for gasoline is 43 gallons. If the price rises to $2.75, the weekly demand drops to 41 gallons. Assuming demand is linear, let
, where Q is the weekly quantity of gasoline demanded and p is the price per gallon. What is the slope m, along with its economic significance?
A) -0.40; if gasoline prices increase by $1 per gallon, then there will be a 0.40 gallon decrease in weekly demand. 
B) -2; if gasoline prices increase by $1 per gallon, then there will be a 2 gallon decrease in weekly demand. 
C) -10; if gasoline prices increase by $1 per gallon, then there will be a 10 gallon decrease in weekly demand. 
D) -0.20; if gasoline prices increase by $1 per gallon, then there will be a 0.20 gallon decrease in weekly demand.

Quizplus · Accepted Answer

The Answer of At a price of $2.55 per gallon, the average weekly demand by consumers for gasoline is 43 gallons. If the price rises to $2.75, the weekly demand drops to 41 gallons. Assuming demand is linear, let
, where Q is the weekly quantity of gasoline demanded and p is the price per gallon. What is the slope m, along with its economic significance?
A) -0.40; if gasoline prices increase by $1 per gallon, then there will be a 0.40 gallon decrease in weekly demand. 
B) -2; if gasoline prices increase by $1 per gallon, then there will be a 2 gallon decrease in weekly demand. 
C) -10; if gasoline prices increase by $1 per gallon, then there will be a 10 gallon decrease in weekly demand. 
D) -0.20; if gasoline prices increase by $1 per gallon, then there will be a 0.20 gallon decrease in weekly demand.

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