Assume that the short-run price elasticity of demand for electricity is 0.03 and the long-run price elasticity of demand is 1.1.The short-run elasticity is classified as being ___________ and the long-run elasticity is classified as being _____________.

Question

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A short-run price elasticity of demand of 0.03 implies that demand is relatively inelastic in the short run. A long-run price elasticity of demand of 1.1 implies that demand becomes more elastic in the long run. Therefore, the short-run elasticity is classified as being inelastic and the long-run elasticity is classified as being elastic.

Assume That the Short-Run Price Elasticity of Demand for Electricity