Asked by Michelle Thompson on Sep 24, 2024
Verified
Gas stations can price the products that they sell in their convenience store a little bit higher because
A) these products are usually complements to the gas sales and the demand for gas is inelastic
B) these products are usually complements to the gas sales and the demand for gas is elastic
C) these products are usually substitutes to the gas sales and the demand for gas is inelastic
D) these products are usually substitutes to the gas sales and the demand for gas is elastic
Price Elasticity
A measure of how the quantity demanded of a good changes in response to a change in its price.
Gas Sales
The commercial activity of selling gaseous fuels, such as natural gas or propane, to consumers.
Convenience Store
A small retail business that stocks a range of everyday items like groceries, snack foods, and household goods, often operating for extended hours.
- Unpack the impact of substitutes and complements on the measurement of demand elasticity.
Verified Answer
HB
Hannah Blackburn4 days ago
Final Answer :
A
Explanation :
Gas sales tend to have an inelastic demand as consumers need to purchase it regardless of the price. Therefore, gas stations can increase the price of complementary products in their convenience store without impacting the demand for their gas.
Learning Objectives
- Unpack the impact of substitutes and complements on the measurement of demand elasticity.