The demand for gasoline is less elastic in the short run than in the long run. Which of the following is a reason for this?
(A) If the price of gasoline is relatively high for a long time, consumers are more likely to buy more fuel-efficient cars.
(B) In the short run, the number of cars driven is fixed; whereas in the long run, people might switch to alternatives like public transportation.
(c) If the price of gasoline is relatively low for a long time, consumers are more likely to buy large, feature-heavy SUVs without much concern for gas mileage.
I say a and b, am i right
I agree
If the price of gasoline is relatively high for a long time, consumers are more likely to buy more fuel-efficient cars.
Yes, you are correct. Both options (A) and (B) contribute to the demand for gasoline being less elastic in the short run compared to the long run.
(A) If the price of gasoline is relatively high for a long time, consumers are more likely to buy more fuel-efficient cars. This is because high prices incentivize consumers to find alternatives that are more cost-effective, such as purchasing vehicles with better gas mileage. In the short run, however, consumers may not have the immediate means or ability to switch to more fuel-efficient cars, so the demand for gasoline remains relatively inelastic.
(B) In the short run, the number of cars driven is fixed; whereas in the long run, people might switch to alternatives like public transportation. In the short run, individuals have limited options for changing their transportation habits. They may have commitments such as work or personal responsibilities that restrict their ability to switch to other modes of transportation. However, in the long run, people have more flexibility to adapt and potentially switch to alternative means of transportation like public transit, carpooling, or cycling. This leads to a more elastic demand for gasoline in the long run.
On the other hand, option (C) is not a reason for the demand for gasoline being less elastic in the short run compared to the long run. It talks about consumer behavior related to low gas prices, but it does not directly address the difference in elasticity between the short run and the long run.