Holding all other forces constant, when the price of gasoline rises, the number of litres of gasoline demanded would fall substantially over a ten-year period because
buyers tend to be much less sensitive to a change in price when given more time to react.
buyers tend to be much more sensitive to a change in price when given more time to react.
buyers will have substantially more real income over a ten-year period.
the quantity supplied of gasoline increases very little in response to an increase in the price of gasoline.
2 points
buyers tend to be much more sensitive to a change in price when given more time to react.
Over a ten-year period, buyers have more time to adjust their behavior and find alternatives to using gasoline. They may choose to use public transportation, carpool, or invest in more fuel-efficient vehicles. As a result, the demand for gasoline would fall substantially as buyers become more sensitive to the increase in price.