Short run vs. long run
Posted by Evan Herrnstadt on May 5, 2008
A brief anecdote:
Yesterday, I was spending time with a friend who lives in rural Maryland, and he mentioned that he’d just sent his resume out in DC looking for a job so he could move into the city. His reason? High gas prices. Driving around Montgomery County every day has simply become too pricey.
We discussed this as he filled up with $3.81/gal gas. It was fascinating seeing short run price inelasticity juxtaposed so immediately on long run price elasticity.