1 . Prices influence the level of energy consumption. In the long run, the demand for energy is more elastic than it is in the short run. Thus, the short-run relationship between price and energy consumption is likely to be a misleading indicator of how price influences the uses of energy over a longer period of time. The vertical demand for energy is a myth, albeit a popular one, that is refuted both by economic reasoning and by careful inspection of the empirical evidence.