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Can the demand be characterized as price elastic

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1. Last week, Cal sold an average of 4,000 gallons per day at an average price of $2.658 per gallon. This week, he raised the average price to $2.758 per gallon. His station is now selling an average of 3,600 gallons per day. Fixed costs of operating the gas station are $438 per day.
What is the price elasticity of demand?

  • Can the demand be characterized as price elastic, price inelastic, or neither?
  • By how much did revenues increase or decrease as a result of the change in price?
  • By how much did profits increase or decline? (Profit is revenue minus total cost.)

Reference no: EM132492208

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