n 2019, 360,000 electric vehicles (EVs) were sold in the United States. Show your formula and calculation steps. a. Suppose the average price of these cars was $40,000. Calculate price elasticity of demand if a $2,000 tax credit caused an increase in sales by 20,000 EVs. b. Calculate cross-price elasticity if a 20 percent increase in the price of gasoline caused an increase in sales of EVs by 30,000.
n 2019, 360,000 electric vehicles (EVs) were sold in the United States. Show your formula and calculation steps. a. Suppose the average price of these cars was $40,000. Calculate price elasticity of demand if a $2,000 tax credit caused an increase in sales by 20,000 EVs. b. Calculate cross-price elasticity if a 20 percent increase in the price of gasoline caused an increase in sales of EVs by 30,000.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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In 2019, 360,000 electric vehicles (EVs) were sold in the United States. Show your formula and calculation steps.
a. Suppose the average
b. Calculate cross-price elasticity if a 20 percent increase in the price of gasoline caused an increase in sales of EVs by 30,000.
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