Power Problem

If small changes in price lead to large changes in quantity demanded, think pizza, the item is elastic. Some goods, like gasoline, are inelastic. A change in that price does not alter the amount driven. Some things are infinitely inelastic, like electricity on a freezing day. The price per megawatt hour of electricity in Texas rose from $25 to $9,000, and natural gas went from $3/million BTUs to $165/million BTUs!

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