What is the answer for question 11) ? http://postimg.org/image/yap8msn29/

pramodpandey | Student

At present price of the gasoline is PĀ =.90$

Inflation=2.5% per year=.025

Price of gasolineĀ  after 10 year increase exponentially as

`A_f=P(1+2.5/100)^10`

`=.90(1.025)^10`

`=1.1521 $`

Thus price of 60 litres gasoline= 60x1.1521 =69.1246 $

= 69 $.

(i) Production cost . also influence price.