Question
Suppose the price elasticity of demand for electricity is 0.2 in the short run and 0.7 in the long run. (a) If the price of
Suppose the price elasticity of demand for electricity is 0.2 in the short run and 0.7 in the long run.
(a) If the price of electricity rises from $0.25 to $0.40 per kilowatt hour, what happens to the quantity of heating oil demanded in the short-run (use the midpoint method in your calculations). (
b) Why might this elasticity depend on the time horizon?
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International Economics
Authors: Thomas A. Pugel
15th edition
73523178, 978-0077769529, 007776952X, 978-0073523170
