Question
Over 15 million households plan to ration energy use this winter to cope with soaring bills The cost of energy is rising and British consumers
Over 15 million households plan to ration energy use this winter to cope with soaring bills The cost of energy is rising and British consumers are left to cope with a harsh winter. Seeing their energy bills rise, millions of households are planning to cut back as much as they can on their energy use despite the cold temperature, putting their health at risk. Many bill payers will cope by spending less on food so that they can afford to keep their homes warm. Household disposable income has been substantially affected by rising energy costs and prices are expected to keep increasing. Some estimate that the average UK home will spend 53 more on energy this year. Source: This is Money, November 6, 2014 a. List and explain the elasticities of demand that are implicitly referred to in the news clip. b. Why, according to the news clip, is the demand for energy inelastic?
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