The price of a gallon of gasoline increases 10% this year.As a result,which event is MOST likely to occur?
A)More people will drive their cars.
B)Public transportation usage will decrease.
C)Gasoline expenditures will increase if gasoline is an inelastic good.
D)Fewer people will ride bicycles,a substitute for car travel.

Question

Quizplus · Accepted Answer

Gasoline is considered an inelastic good, meaning that changes in price do not affect demand significantly. As a result, people will still need to purchase gasoline despite the price increase, leading to an increase in gasoline expenditures.

The Price of a Gallon of Gasoline Increases 10% This