Intermediate Microeconomics and Its Application 12th Edition by Walter Nicholson,Christopher Snyder

Exercise 22

Suppose that state law requires that every gasoline pump have exactly one attendant, and suppose that gasoline pumps are always in use filling motorists' cars.
1. Will a rise in attendants' wages cause fewer to be hired? Explain.
2. Suppose attendants' wages represent one-third of the total cost of gasoline to motorists and that the price elasticity of demand for gasoline is -0.50. What is the elasticity of demand for gasoline pump attendants?