Question

Suppose that gasoline prices increase dramatically this month. Lola commutes 100 miles to work each weekday. Over the next few months, Lola drives less on the weekends to try to save money. Within the year, she sells her home and purchases one only 10 miles from her place of employment. These examples illustrate the importance of

Answer 1

The time horizon as in the long run the consumer can change their consumer preferences and adjust to change in price for the goods

Step-by-step explanation:

At the first moment, Lola demand for gasoline is inelastic as it cannot avoid the cost to moving to his workplace.

As time passes the demand canrespond and adjust to the new information givne by the market/price system

Lola moves to a closer home and finds a solution that wasn't viable in the short run.