Microeconomics question on elasticity?

The short-run elasticity of demand for residential electricity with respect to a change in the price of a natural gas is estimated to be 0. The long-run elasticity is put at 0.5. Based on these numbers, are electricity and natural gas subsititutes, complements, or independent in the long run? What about the short run? Why is the relationship between these two goods different in the short-run than in the long-run?

3 Responses to “Microeconomics question on elasticity?”

  1. JuanB Says:

    Short run – independent
    Long run – substitutes

    In the short run your residential demand is related to what appliances you already have. You would not spend thousands of dollars the moment the price of fuel changes a little to buy new ones. In the long run you will eventually replace them as they wear out, or if it starts to make economical sense to do so. New housing being built also starts to add up and will have new appliances. At these points, the choice can be made between which fuel to use.

  2. Mr. Burns Says:

    rubber bands

  3. Rudolf Clausius Says:

    stress = E * strain
    where E is the elastic modulus
    In the short run (for steel, below lower yield limit, and aluminum, strain is 0.002), elasticity is constant. In the long run, after the material plastically deforms, elasticity is not constant.
    Elasticity changes because as you place stress on the material, you will induce plane shifting in the crystal lattice structure, which causes dislocation movements.