Suppose the price elasticity of demand for heating oil is 0.2 in the short run and 0.7

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Suppose the price elasticity of demand for heating oil is 0.2 in the short run and 0.7 in the long run.

a. if the price of heating oil rises from $1.80 to $2.20 per gallon, what happens to the quantity of heating 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?

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Principles of economics

ISBN: 978-0538453042

6th Edition

Authors: N. Gregory Mankiw

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Question Posted: Dec 14, 2012 06:48 AM

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Suppose the price elasticity of demand for heating oil is 0.2 in the short run and 0.7

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a The percentage change in price is equal to 220 18...View the full answer

Principles of economics

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