The demand curve for gasoline should be
A) more elastic in the long run than in the short run.
B) less elastic in the long run than in the short run.
C) as elastic in the long run as it is in the short run.
D) more or less elastic in the long run versus the short run depending upon supply conditions.

Question

Quizplus · Accepted Answer

In the short run, consumers may have relatively fewer options to reduce their gasoline consumption when the price increases, such as using more efficient vehicles or alternative modes of transportation. In the long run, consumers have more opportunities to adjust their behavior or investments, such as moving closer to work, buying a hybrid car, or using telecommuting. Therefore, the demand for gasoline is likely to be more elastic in the long run than in the short run.

The Demand Curve for Gasoline Should Be