The price of a litre 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

If gasoline is an inelastic good, meaning that there are limited substitutes and consumers will continue to purchase it despite price increases, then the increase in price will result in higher gasoline expenditures.

The Price of a Litre of Gasoline Increases 10% This