If the short-run price elasticity of demand for petroleum is 0.8,which of the following statements is most likely to be true for the long run?
A)The price elasticity of demand will be less than 0.8.
B)The price elasticity of demand will be greater than 0.8.
C)The price elasticity of demand will be 0.8.
D)No generalization can be made about the differences between the short run and the long run.

Question

Quizplus · Accepted Answer

In the long run, consumers have more time to adjust their behavior and find substitutes for petroleum, thus the price elasticity of demand is likely to be higher than in the short run. Therefore, option B is the most likely choice.

If the Short-Run Price Elasticity of Demand for Petroleum Is