What might you infer about the price elasticity of demand for diesel fuel in the short run? In the long run?
Diesel fuel is very important and absolutely necessary. In the short run the price elasticity is zero. The demand for the product is perfectly inelastic. In the longrun it can be substituted with new inventions. It can be possible substituting with electricai or other form of energy. Let us view the table below
Diesel fuel change in the price in the short run change in the quantitydd Elasticity
10% 0% 0
30% 0% 0
This can be proved through the figures below. Fig:1 shows the inelastic demand in the short run. Fig;2 longrun elastic demand.
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