Suppose that in an attempt to induce citizens to conserve energy, the government enacts regulations requiring all air conditioners to be more efficient in their use of electricity. After the regulation was implemented, government officials were surprised to discover that people were using even more electricity than before. How is this possible?
(A) Because the regulation effectively reduced the price of cool air, consumers with sufficiently elastic demand might have bought substantially more of it.
(B) There is no way the observed change could have occurred if all consumers were fully informed, self-interested, and rational.
(C) The government ignored the possibility that the demand curve for electricity might be upward sloping.
(D) In practice, people often pay little attention to the relevant costs and benefits when deciding how much of a good, like electricity, to use.
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