Using your knowledge of elasticity, why is gasoline inelastic in the short-term but elastic in the long-term? Explain why automobiles tend to have the opposite effect, being elastic in the short-term but inelastic in the long-term. Be sure to give detailed responses.

Gasoline is inelastic in the short term because people need to be able to get where they are going and willing to pay expensive prices in order to do so. However, in the long term, continually high gasoline prices will encourage car buyers to trend towards more fuel efficient or electric vehicles. Automobiles, on the other hand, are elastic in the short term because as long as an individual has a means of transportation, purchasing a new car is not entirely necessary. So drastic changes in price may encourage potential purchasers to put off the purchase until prices reduce. In the long term, automobiles are less elastic because cars have a life span and when they are no longer functioning a person is forced to pay prices offered by dealers.