ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Short run versus long run: Price elasticity of demand is usually lower in the short run, before consumers have much time to react, than in the long run, when they have greater opportunity to find substitute goods. Thus, demand is more price elastic in the long run than in the short run.

Detailed explanation-2: -Demand tends to be more elastic in the long rung rather than in the short run, because when prices change consumers often need more time to respond and change their shopping habits. So in the short run, demand for fuel may be very inelastic.

Detailed explanation-3: -Demand tends to be more price inelastic in the short-run as consumers don’t have time to find alternatives. In the long-run, consumers become more aware of alternatives. Price elasticity of demand measures the responsiveness of demand to a change in price.

Detailed explanation-4: -All goods tend to be more elastic in the long-run than in the short run. Why? Time allows people to find substitutes. So, if the price of gasoline were to increase, in the short-run you would likely decrease the quantity you demand, but only slightly.

Detailed explanation-5: -The price elasticity of demand is the percentage change in the quantity demanded of a good or service divided by the percentage change in the price. The price elasticity of supply is the percentage change in quantity supplied divided by the percentage change in price.