Some environmental groups are on record suggesting that the price of gasoline should be much higher than it was in the early 1990s.Why might they say this?
A) They own stock in oil companies.
B) They anticipate that the longer the price is high, the more elastic the response by consumers will be.
C) They anticipate that the longer the price is high, the less elastic the response by consumers will be.
D) They anticipate that higher prices will reduce the price elasticity of supply of oil.

Question

Quizplus · Accepted Answer

Environmental groups likely support higher gasoline prices because they believe it will lead to a more elastic response by consumers over time, meaning consumers will adjust their behavior to use less gasoline as prices remain high. This could include driving less, using more fuel-efficient vehicles, or switching to alternative forms of transportation, ultimately leading to reduced carbon emissions and environmental impact.

Some Environmental Groups Are on Record Suggesting That the Price