Feel free to use this one in your microeconomics courses. I know I will:
Gasoline prices are still dropping, but AAA Carolinas says many North Carolinians will skip the usual Labor Day weekend trip this year.
Triangle drivers were paying an average $3.608 a gallon for regular today, and some Raleigh stations posted pump prices below $3.45. Even though prices have fallen from a local record high $4.054 in mid-July, 2008 brings the most expensive Labor Day gas on record.
Gas for a beach drive this weekend will cost 92 cents a gallon more than in 2007 -- and more even than in 2005, when Hurricane Katrina disrupted the nation's fuel supplies and made Labor Day travel extra pricey.
AAA Carolinas estimated that 720,300 North Carolinians will drive more than 100 miles round trip for the holiday weekend this year, down almost 1 percent from last year's Labor Day motoring.
Let's assume that the percentage change in quantity demanded of gasoline is 1%. This requires assuming that the amount driven over Labor Day (for over 100 mile travelers) is equal between the two years which is very likely a big underestimate. The percentage change in price is 34% [% = 100*0.92/(3.61 - 0.92)]. Therefore, demand elasticity is at least 0.03%.
