Tom Jerry
July 6th, 2010
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economics.Two drivers Tom and Jerry each drives up to a petrol station?
Two drivers Tom and Jerry each drives up to a petrol station. Before looking at the price, each places an order. Tom says, “I’d like 10 liters of petrol.” Jerry says,” I’d like $10 of petrol.’ What is each driver’s price elasticity of demand?
Tom has relatively inelastic demand for petrol – he doesn’t cares about price but rather quantity – thus he is less sensitive to price changes.
Jerry has relatively elastic demand for petrol – he cares more about price rather than quantity – thus he is more sensitive to price changes.
Fisher score for Tom and Jerry short
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