Which of the following statements about the consumers’ responses to rising gasoline prices is correct? Because gasoline is a necessity, consumers do not decrease their quantity demanded in either the short run or the long run. About 10 percent of the long-run reduction in quantity demanded arises because people drive less and about 90 percent arises because they switch to more fuel-efficient cars. About 90 percent of the long-run reduction in quantity demanded arises because people drive less and about 10 percent arises because they switch to more fuel-efficient cars. About half of the long-run reduction in quantity demanded arises because people drive less and about half arises because they switch to more fuel-efficient cars.
Which of the following statements about the consumers’ responses to rising gasoline prices is correct? Because gasoline is a necessity, consumers do not decrease their quantity demanded in either the short run or the long run. About 10 percent of the long-run reduction in quantity demanded arises because people drive less and about 90 percent arises because they switch to more fuel-efficient cars. About 90 percent of the long-run reduction in quantity demanded arises because people drive less and about 10 percent arises because they switch to more fuel-efficient cars. About half of the long-run reduction in quantity demanded arises because people drive less and about half arises because they switch to more fuel-efficient cars.
Chapter4: Demand, Supply, And Market Equilibrium
Section: Chapter Questions
Problem 7P
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Q4
Which of the following statements about the consumers’ responses to rising gasoline prices is correct?
- Because gasoline is a necessity, consumers do not decrease their quantity demanded in either the short run or the long run.
- About 10 percent of the long-run reduction in quantity demanded arises because people drive less and about 90 percent arises because they switch to more fuel-efficient cars.
- About 90 percent of the long-run reduction in quantity demanded arises because people drive less and about 10 percent arises because they switch to more fuel-efficient cars.
- About half of the long-run reduction in quantity demanded arises because people drive less and about half arises because they switch to more fuel-efficient cars.
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