Suppose the price elasticity of demand for heating oil is 0.2 in the short run and 0.7

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Suppose the price elasticity of demand for heating oil is 0.2 in the short run and 0.7 in the long run.

a. If the price of heating oil rises from $1.80 to

$2.20 per gallon, what happens to the quantity of heating oil demanded in the short run? In the long run? (Use the midpoint method in your calculations.)

b. Why might this elasticity depend on the time horizon?

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Principles Of Macroeconomics

ISBN: 9780357133491

9th Edition

Authors: N. Gregory Mankiw

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Question Posted: Sep 28, 2024 08:00 AM

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Suppose the price elasticity of demand for heating oil is 0.2 in the short run and 0.7

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Principles Of Macroeconomics

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