Question
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
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 $1.8 to $2.2 per gallon, what happens to the quantity of heating oil demanded in the short run? In the long run?
(b) Why might this elasticity depend on the time horizon?
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Microeconomics Principles, Problems and Policies
Authors: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn
20th edition
978-0077660819, 77660811, 978-1259450242
