Question

The electric company in a city increased its prices by 15% five years ago. Over time more people have purchased efficient appliances or switched to gas, and the demand of electricity in the long run has become more ________. Also in the long run the equilibrium quantity demanded has ________.a. elastic; incresedb. inelastic; deacresedc. elastic; deacresed

Answer 1

elastic; deacrese

Step-by-step explanation:

Elasticity of demand measures the responsiveness of quantity demanded to changes in price.

Demand is elastic if quantity demanded is more sensitive to changes in price.

Demand is inelastic if there's little or no change in quantity demanded when price changes.

From the question, we can see that due to the price increase, overtime, consumers shifted to other alternatives. Thus, the quantity demand of electricity fell. Demand is elastic.

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