Demand for gasoline is less price elastic in the short run than in the long run because in the long run:
A) there is a lack of substitutes.
B) consumers have more time to adjust.
C) gasoline's share of a budget is unimportant.
D) gasoline is a luxury good.

Question

Quizplus · Accepted Answer

In the long run, consumers have more time to adjust their consumption habits, such as by finding alternative modes of transportation, purchasing more fuel-efficient vehicles, or moving closer to work. This increased ability to adjust makes demand more price elastic in the long run compared to the short run, where such adjustments are not as feasible.

Demand for Gasoline Is Less Price Elastic in the Short