For most goods and services, [...] is much more elastic than the short-run demand.
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the long-run demand
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Open it For most goods and services, the long-run demand is much more elastic than the short-run demand. The reason is that if price were to change for, say, gasoline, we probably would not be able to respond quickly with a significant reduct
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4.1. Own-Price Elasticity of Demand the price of housing were to rise significantly, however, most households would try to find a way to reduce the quantity they buy, at least in the long run.
This example leads to another characteristic regarding price elasticity. <span>For most goods and services, the long-run demand is much more elastic than the short-run demand. The reason is that if price were to change for, say, gasoline, we probably would not be able to respond quickly with a significant reduction in the quantity we consume. In the short run, we tend to be locked into modes of transportation, housing and employment location, and so on. The longer the adjustment time, however, the greater the degree to which a household could adjust to the change in price. Hence, for most goods, long-run elasticity of demand is greater than short-run elasticity. Durable goods, however, tend to behave in the opposite way. If the price of washing machines were to fall, people might react quickly because they have an old machine that they know will need to be replaced fairly soon anyway. So when price falls, they might decide to go ahead and make the purchase. If the price of washing machines were to stay low forever, however, it is unlikely that a typical consumer would buy all that many more machines over a lifetime.
Certainly, whether the good or service is seen to be non-discretionary or discretionary would help determine its sensitivity to a price change. Faced with the same percenta
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