Comment on the long and short term cross-price elasticity of demand for petrol and diesel.

The short-term XPED for petrol and diesel is likely to be very low, as most consumers are unable to quickly switch between the two fuels for their vehicles. However, if there is a significant difference in perceived value between the two fuels, consumers will tend towards the better value fuel. Since fuel represents a sizeable cost for a lot of consumers, namely transport firms and commuters, the long term XPED will likely be quite elastic.

JS
Answered by James S. Economics tutor

3316 Views

See similar Economics A Level tutors

Related Economics A Level answers

All answers ▸

Explain why a rise in investment should help to increase the rate of growth of the Uk economy. (9 marks)


What is the definition of fiscal policy and what are the main differences between an expansionary fiscal policy and contractionary fiscal policy


How am I best able to improve my evaluation skills in essays in order to achieve higher marks?


What is the Price Elasticity of Demand?


We're here to help

contact us iconContact ustelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

© MyTutorWeb Ltd 2013–2025

Terms & Conditions|Privacy Policy
Cookie Preferences