a large increase in gas prices creates a demand for cars with good gas milage. It takes months for car companies to make these cars. How do you describe this market for cars

Question

Frances Morgan

Social Studies

14 January, 17:56

a large increase in gas prices creates a demand for cars with good gas milage. It takes months for car companies to make these cars. How do you describe this market for cars

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Kristina Harvey · Answer 1

A large increase in gas prices creates a demand for cars with good gas milage. It takes months for car companies to make these cars. This market for cars can be described as inelastic.

This happens when a change in price leads to a smaller percentage change in demand. It is inelastic because In the short-run it takes time for consumers to look for alternatives.