In 2016, 160,000 electric vehicles were sold in the United States. The instructions state to enter my response rounded to one decimal place.
Part A. Supposing the average price of these cars was $40,000. Calculate price elasticity of demand if a $7,000 tax credit caused an increase in sales by 15,000 electric vehicles. What do I need to do here to calculate the answer?
Part B. Calculate cross-price elasticity if a 20% increase in the price of gasoline caused an increase in sales of electric vehicles by 8,000. What do I need to do here to calculate the answer?