Suppose gas prices have steadily increased over the last decade. We would expect the price elasticity of demand for gas, when measured over the last decade, to:
A) be more elastic than it has been in the last six months.
B) be less elastic than it has been in the last six months.
C) be relatively the same as the last six months.
D) no longer be an issue because consumers are used to higher gas prices.

Question

Quizplus · Accepted Answer

The price elasticity of demand for gas over a decade is likely to be more elastic than in the last six months because consumers have more time to adjust their behavior to high prices over longer periods. This could include finding alternative modes of transportation, moving closer to work, or purchasing more fuel-efficient vehicles.

Suppose Gas Prices Have Steadily Increased Over the Last Decade