One response to increased oil prices, which reflects long-run elasticity and not short-run elasticity, is
A) gasoline rationing
B) fewer joy rides
C) shorter family vacations
D) smaller cars
E) less winter heat

Question

Quizplus · Accepted Answer

Long-run elasticity refers to how consumers and producers adjust their behavior over time in response to changes in price. Choosing smaller cars is a long-run response to increased oil prices because it involves a significant change in behavior and potentially a substantial financial decision that people are more likely to make after they have had time to adjust to the new price levels. Other options like gasoline rationing, fewer joy rides, shorter family vacations, and less winter heat are more reflective of short-run elasticity, where individuals make quicker, less permanent adjustments to their behavior.

One Response to Increased Oil Prices, Which Reflects Long-Run Elasticity