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

Question

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

Edition 12ISBN: 978-1133189022

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

Edition 12ISBN: 978-1133189022

Exercise 36

Table 9.3 reports that the estimated long-run elasticity of supply for natural gas in the United States is about 0:5. Hence, this estimate suggests that the supply of natural gas is fairly inelastic.
1. Is this estimate consistent with the fact that natural gas prices tend to rise rapidly during severe winters?
2. Is this estimate consistent with the fact that natural gas prices have fallen in recent years with the development of new production techniques such as hydraulic fracturing? $Table 9.3 reports that the estimated long-run elasticity of supply for natural gas in the United States is about 0:5. Hence, this estimate suggests that the supply of natural gas is fairly inelastic. 1. Is this estimate consistent with the fact that natural gas prices tend to rise rapidly during severe winters? 2. Is this estimate consistent with the fact that natural gas prices have fallen in recent years with the development of new production techniques such as hydraulic fracturing?$

Explanation

Verified

1.
Despite the price rise, assuming the ...