Answer:
The demand for gasoline and the total revenue from the gasoline will remain the same.
Step-by-step explanation:
Price elasticity of demand can be defined as a measure of the sensitivity of the demand of a particular good or service in relation to a change in the price. In the context of the price elasticity of demand, a good can either be elastic or inelastic. A good that is inelastic is one whose price elasticity of demand is less than 1. This basically implies that the good's demand doesn't change with a corresponding change in price. On the other hand, a good that is elastic, is one whose price elasticity of demand is more than 1, which implies that the demand of the good changes with changes in price. Goods that are predominantly inelastic are needs that people cannot do without which include things like food, while elastic goods are those that are considered luxuries that people can do without especially when the price rises.
Since the price elasticity of demand for gasoline is estimated to be 0.4, which is less than 1, we can conclude that gasoline is inelastic. Meaning it's demand doesn't change with increasing prices. The demand for gasoline will remain the same even with increase in the price of oil. The total revenue from gasoline will also remain the same since even though the availability of gasoline is reduced, the sellers will adjust for this reduction in the price.