(Solved): a. When is demand perfectly elastic? When is demand perfectly inclastic? What are the values of the ...

a. When is demand perfectly elastic? When is demand perfectly inclastic? What are the values of the price elasticity of demand when demand is perfectly elastic or perfectly inelastic? What do perfectly elastic and perfectly inelastic demand curves look like? b. Suppose the price of gasoline in July 2019 averaged \( \$ 2.35 \) a gallon and 15 million gallons a day were sold. In October 2019, the price averaged \( \$ 3.05 \) a gallon and 14 million gallons were sold. If the demand for gasoline did not shift between these two months, use the midpoint formula to calculate the price elasticity of demand. Indicate whether demand was clastic or inelastic. c. A study of the effects of the minimum wage on employment of low-skilled worker estimated the price elasticity of demand for low-skilled workers is \( -0.75 \). Suppose that the government is considering raising the minimum wage from \( \$ 7.25 \) per hour to \( \$ 7.75 \) per hour. Based on this information, calculate the percentage change in the employment of low skilled workers. Use the midpoint formula.