Suppose the price elasticity of demand for oil is 0.3 in the short run and 0.8 in the long run. a) If the price of oil rises from P36.00 to P67.00 per liter, what happens to the quantity of oil demanded in the short run? In the long run? (Use the midpoint method in your calculations.) b) Why might this elasticity depend on the time horizon?
Suppose the price elasticity of demand for oil is 0.3 in the short run and 0.8 in the long run. a) If the price of oil rises from P36.00 to P67.00 per liter, what happens to the quantity of oil demanded in the short run? In the long run? (Use the midpoint method in your calculations.) b) Why might this elasticity depend on the time horizon?
Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter19: Elasticity
Section19.1: Elasticity: Part 1
Problem 1ST: On Tuesday, the price and quantity demanded are 7 and 120 units, respectively. Ten days later, the...
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