Question: The demand for gasoline is inelastic while the demand for software is elastic. Suppose that there is an increase in supply for both gasoline and

The demand for gasoline is inelastic while the demand for software is elastic. Suppose that there is an increase in supply for both gasoline and software.

What will happen to the equilibrium price and quantity in each market?

Which market will experience a larger change in price?

Which market will experience a larger change in quantity?

What will happen to consumer expenditures in each market? Explain.

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