Question

Suppose that, in an attempt to entice citizens to conserve energy, the government enacted regulations requiring that all air conditioners be more efficient in their use of electricity. After this regulation was implemented, government officials were then surprised to discover that people used even more electricity than before. Using the concept of price elasticity, explain how this increase might have occurred?

Answer 1

Answer:

Higher in the long run than the short run, because farmers cannot easily change their decisions about how much basmati rice to plant once the current crop has been planted

Explanation:

Price elasticity of supply is normally more elastic in the long run. Farmers will be more prepared and have more time to accept changes in the long run