Readers Question: the elasticity of demand for good is likely to be greater in the short run than in the long run true or false?
Elasticity of demand measures the responsiveness of demand to a change in price. See: Price Elasticity Demand
In the short run demand is likely to be more inelastic (low = less than 1).
If people are used to buying a good, then when the price goes up, they will buy it out of habit. However, when they realise the price rise is permanent they will expend energy in looking for alternatives.
PRice Elasticity of Demand for Oil.
If the price of oil increases people with petrol cars will still buy petrol. However, over time people may increasingly start to buy cars which use alternative energy sources such as natural gas, hydrogen or solar panels. But it will take time to make the switch
3 comments ↓
first of all, i need a comprehensive topic about the long run vurses short run price elasticity of demand and supply
now my comment is that this site is exactly a marvellous one,,that aids a lot to the students
infact thats a query not a comment
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