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July 30, 2015

Homework Help: Economics

Posted by Anonymous on Thursday, April 19, 2012 at 5:58pm.

A large increase in gas prices creates a demand for cars with good gas mileage. It takes months for car companys to make these cars. How do you describe this market for cars?

A. Inelastic
B. Static

I said A.Inelastic because, its a short run and the firm cannot easily change its output level. Am I right?

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