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3 years ago

Fill in the blanks with given options:

Business

1 answer:

labwork [276]3 years ago

4 0

Answer:

1. fall

2. Larger

3. more

Explanation:

The price elasticity is relative measure of change in demand. When the demand of heating oil decreases due to increase in price then the heating oil is considered as price elastic. The elasticity of heating oil is 0.2 in the short run and 0.7 in the long run which means customers respond less in change of demand in short run due to change in price. When the price of heating oil increases, the demand will fall in the short run.

In the short run customers may not find time to respond to the change in price. The change in demand in short run is smaller and change in demand in Long run will be larger.

The price elasticity of heating oil is more in long run because customer may find alternate sources at a cheaper rate and may switch to it causing a greater fall in demand of heating oil.

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