With supply chain issues and inflation causing rising prices for many goods, consumers are forced to reexamine their priorities when it comes to buying certain items or their behavior. I am an avid consumer of bacon, however with bacon now reaching $8, I have determined that I was actually elastic on my demand for bacon, and as such decided to cease buying it. Bacon, while nice, was a non-essential product for me, so I was not willing to spend the higher price. When it comes to grocery items like this, the decision on whether to keep buying, substitute, or stop buying altogether is going to vary from person-to-person.
However, myself and virtually everybody else is inelastic on fuel. Everbody needs fuel and there is no substitute unless you own an electric car (which very few people do) and it is not viable to simply stop buying it. As such, people need to change their behavior to accommodate for the higher fuel prices. This may mean practicing more efficient driving, or simply driving as little as possible. Essentially, an inelasticity in fuel actually forces elasticity in behavior.
A very timely topic and discussion, especially with high fuel prices. How do you see this playing out long term? If prices were to continue as they are, do you think people will maintain their fuel efficiency or eventually switch to electric cars? Do you see car businesses that are only selling fuel-powered cars as well as local automotive shops (that don't have expertise in electric cars) going out of business? How big of an impact will this have on the economy?