Time also plays a big role in elasticity. For example, if the price of gasoline increases, the quantity bought would only diminish a little in a day or a week. Therefore, the demand for gasoline is inelastic in a day or week. But the demand over a month will be certainly elastic, because a month is long enough for people to change their driving behavior. They may look for a substitution such as diesel or drive less and use public transportation more.
People think the United States is a wealthy and developed country, and supply of water is abundant.
But in reality, it is not. Although the United States has averaged 30 inches of precipitation per year, it is not evenly distributed in time and space. Much of the precipitation is lost, and we are only utilizing about 20 percent of it. In dry years, reservoirs of some of our largest cities have fallen to dangerously low levels, and over large areas of the nation declining groundwater levels are threatening the structure of local economies based upon water from underground sources. One remedy of such conditions, the water shortages, is to allocate the water more efficiently using proper pricing policies.