An attempt to entice citizens to conserve energy

Assignment Help Business Economics

Reference no: EM131240527

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, which of the following statements best explains how this increase might have occurred?

A- Because the regulation effectively reduced the price of cool air, consumers with sufficiently elastic demand might have bought substantially more of it.

B- There is no way the observed change could have occurred if all consumers were fully informed, self-interested, and rational.

C- The government ignored the possibility that the demand curve for electricity might be upward sloping.

D- In practice, people often pay little attention to the relevant costs and benefits when deciding how much of a good, like electricity, to use.

Reference no: EM131240527

Questions Cloud

Determine how much the consumption of this good will change : Suppose the own price elasticity of demand for good X is -4, its income elasticity is 3, its advertising elasticity is 4, and the cross-price elasticity of demand between it and good Y is 4. Determine how much the consumption of this good will change..

Revenue at major cellular telephone manufacturer : Revenue at a major cellular telephone manufacturer was $1.4 billion for the nine months ending March 2, up 77 percent over revenues for the same period last year. Given this information, is it surprising that the company’s revenue increased when it d..

Consider the market for chocolate : Consider the market for chocolate. Say that bad weather has hurt cocoa bean crops. At the same time, people are wanted to eat more chocolate. Which event affects demand, and which affects supply? What would be the effect on equilibrium price and ..

The cost to the government of buying firms unsold units : Consider a market where supply and demand are given by QXS = -16 + PX and QXd = 83 - 2PX. Suppose the government imposes a price floor of $40, and agrees to purchase any and all units consumers do not buy at the floor price of $40 per unit. Determine..

An attempt to entice citizens to conserve energy : 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 ..

What cross-price elasticity of demand : A 2 percent increase in the price of milk causes a 4 percent reduction in the quantity demanded of chocolate syrup. What is the cross-price elasticity of demand for chocolate syrup with respect to the price of milk? what Cross-price elasticity of dem..

In competitive markets a surplus or shortage will cause : In competitive markets, a surplus or shortage will cause:

Benefited from changes in end-consumer demand : Why is the concept of derived demand so important for companies selling products and services to other organizations? What is an example where an industrial company has benefited from changes in end-consumer demand?

Find the change in units demanded when the price changes : The price elasticity of demand for a good is -1.1, and consumers currently purchase 114 units of the good. Find the change in units demanded when the price changes 9 percent. Round your answer to two decimals.

User Account

All Pages