Suppose you are advising the government on changes in the gasoline market.The current price is $1.00 per litre and the quantity demanded is 2.5 million litres per day.Short-run price elasticity of demand is constant at 0.3.If the supply of gasoline is reduced so that the price rises to $1.50 per litre,then quantity demanded is predicted to fall in the short run by
A)15%,and total expenditure will rise.
B)15%,and total expenditure will fall.
C)50%,and total expenditure will fall.
D)12%,and total expenditure will rise.
E)13.3%,and total expenditure will rise.

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The Answer of Suppose you are advising the government on changes in the gasoline market.The current price is $1.00 per litre and the quantity demanded is 2.5 million litres per day.Short-run price elasticity of demand is constant at 0.3.If the supply of gasoline is reduced so that the price rises to $1.50 per litre,then quantity demanded is predicted to fall in the short run by
A)15%,and total expenditure will rise.
B)15%,and total expenditure will fall.
C)50%,and total expenditure will fall.
D)12%,and total expenditure will rise.
E)13.3%,and total expenditure will rise.

Suppose You Are Advising the Government on Changes in the Gasoline