Current increases in the price of gasoline are expected to persist indefinitely.
Based only on this information, the long minus run demand for gasoline would be expected to be
A.
relatively inelastic comma as compared to the short minus run demand
.
B.
relatively elastic comma as compared to the short minus run demand
.
C.
unitary
.
D.
There is not enough information to determine anything about elasticity.
B. relatively elastic, as compared to the short-run demand
Based on the information provided, it is not possible to determine the elasticity of the long-run demand for gasoline. Elasticity is a measure of the responsiveness of demand to changes in price. The information only indicates that the price of gasoline is expected to increase indefinitely, but it does not provide any information about how consumers will respond to this price increase in the long run. Therefore, the answer is D. There is not enough information to determine anything about elasticity.
To determine the answer to this question, we need to understand the concept of price elasticity of demand. Price elasticity of demand measures the responsiveness of quantity demanded to changes in price.
Given the information that "current increases in the price of gasoline are expected to persist indefinitely," we can conclude that the price of gasoline is expected to continue to rise in the long run.
In general, the long-run demand for a good tends to be more elastic (responsive) to price changes compared to the short-run demand. This is because consumers have more time to adjust their behavior, find substitutes, or change their consumption patterns in response to price increases.
Therefore, based on the information provided, the long-run demand for gasoline would be expected to be:
B. relatively elastic, as compared to the short-run demand.