Elasticity with Gasoline

The price elasticity of demand for gasoline in the short run is less elastic than the long run, when demand for gasoline is more elastic. The price elasticity of demand for gasoline is measured by the responsiveness of quantity demanded to change gasoline prices. There is a worldwide demand for refined oil that is used in recreational and commercial vehicles. In recent history the price fluctuation for gasoline has changed so dramatically that it can be considered to be a necessity. This demand is fueled by consumers and businesses that have very large investments in cars, gas-powered trucks, and other equipment. In the long run, people can change those investments – in other words, rea...