(Answered) Increases in gasoline prices does not dramatically change how much gasoline is sold. This would be…

Written by

in

➤ What is the economic term for when gasoline sales do not fall much after a price rise?
That describes price inelastic demand. Demand is inelastic when the percentage change in quantity demanded is smaller than the percentage change in price (elasticity magnitude < 1). Consumers reduce consumption only slightly after price increases because the good is often necessary and lacks close substitutes in the short run.

Comments

Leave a Reply

Your email address will not be published. Required fields are marked *