1 1. In the mythical nation of Oz, gasoline used to sell for $3.25 a gallon, and the natives purchased 120,000 gallons a week. Four years ago, the price rose to $4.25 a gallon, and the natives reduced their quantity demanded to 110,000 gallons a week. a. Calculate the price elasticity for this change. Show formula and math! (4 pts.) b. Today, gas again sells for $3.25 a gallon in Oz, but instead of again being willing and able to purchase 120,000 gallons a week, the natives are only willing and able to buy 115,000 gallons a week. Why not 120,000 gallons a week again? What is responsible for this buying change? Explain. (5 pts.)

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1 a Calculate the price elasticity for this change Show formula and math Price elasticity of demand ... View the full answer