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If the price elasticity of demand for gasoline is 0

Economics

If the price elasticity of demand for gasoline is 0.20:

a. the demand for gasoline is linear.

b. gasoline is elastic.

c. gasoline is inelastic.

d. gasoline is perfectly elastic.

e. gasoline is an inferior good.

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If the price elasticity of demand for gasoline is 0.20, gasoline is inelastic.

The price elasticity of demand (PED) is inelastic if the PED coefficient is less than 1 in absolute value. Since the price elasticity of demand for gasoline is 0.20, which is less than 1, gasoline is inelastic. There is no information showing that it is a linear demand or an inferior good.

Therefore, c is the correct option.