Question: 1. How would drivers make a rational decision about when to switch from E100 to blended petrol? 2. How would you work out the cross-price

1. How would drivers make a ‘rational’ decision about when to switch from E100 to blended petrol?

2. How would you work out the cross-price elasticity of demand for blended petrol with respect to a change in the price of ethanol? How does it vary with the actual price of ethanol?

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