Final answer:
The percentage change in the quantity of gasoline supplied is 16% when the price elasticity of supply is 0.8 and there is a 20% increase in the price of gasoline.
Step-by-step explanation:
If the price elasticity of supply for gasoline is 0.8, and the price of gasoline increases by 20%, we can calculate the percentage change in the quantity of gasoline supplied by using the formula for price elasticity of supply:
Price Elasticity of Supply = (Percentage change in quantity supplied) / (Percentage change in price)
Therefore, to find the percentage change in quantity supplied, we re-arrange the formula to solve for it:
Percentage change in quantity supplied = Price Elasticity of Supply × Percentage change in price = 0.8 × 20%
Percentage change in quantity supplied = 16%
The correct answer to the question is therefore 16%, which is option (c).