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the market price elasticity for retail gasoline is ?0.9. If the Rothschild index is 0.6, what...

the market price elasticity for retail gasoline is ?0.9. If the Rothschild index is 0.6, what does this imply about the elasticity faced by a typical retailer

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Answer #1

Elasticity faced by a typical retailer = Elasticity of demand for the total market / Rothschild index

                                                        = -0.9 / 0.6

                                                        = -1.5

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