Suppose you are advising the government on changes in the gasoline market.The current price is $1.00 per litre and the long-run price elasticity of demand is constant at 0.8.If a tax on gasoline causes the price to rise to $1.50 per litre,then quantity demanded is predicted to fall in the long run by
A)12% and total expenditure will fall.
B)24% and total expenditure will fall.
C)32% and total expenditure will fall.
D)24% and total expenditure will rise.
E)50% 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 long-run price elasticity of demand is constant at 0.8.If a tax on gasoline causes the price to rise to $1.50 per litre,then quantity demanded is predicted to fall in the long run by
A)12% and total expenditure will fall.
B)24% and total expenditure will fall.
C)32% and total expenditure will fall.
D)24% and total expenditure will rise.
E)50% and total expenditure will rise.

Suppose You Are Advising the Government on Changes in the Gasoline