Final answer:
Demand for heating oil is less responsive to price changes in the short run compared to the long run, as indicated by a lower price elasticity of demand (0.1) in the short run and a higher elasticity (0.9) in the long run. The correct answer is option 2.
Step-by-step explanation:
The student's question regards the responsiveness of demand for heating oil to changes in price in the short run compared to the long run. Using the information on price elasticity of demand for heating oil, which is 0.1 in the short run and 0.9 in the long run, we can conclude that the demand for heating oil is less responsive to changes in price in the short run than in the long run. This is because a lower elasticity value indicates less responsiveness. Therefore, the correct answer is that demand for heating oil is less responsive to changes in price in the short run compared to the long run, which corresponds to option 2.
In the short run, consumers find it hard to adjust their energy consumption significantly. They may take small measures like adjusting the thermostat or carpooling. However, in the long run, they have the flexibility to make larger and more impactful changes, such as upgrading to more energy-efficient appliances, automobiles, or improving home insulation, resulting in a higher elasticity and greater responsiveness to price changes.