If people have more time to adjust to a price change, the price elasticity of demand for that good is likely to
A)increase
B)decrease
C)fall to zero
D)become equal to -1
E)remain unchanged

Question

Quizplus · Accepted Answer

When people have more time to adjust to a price change, they have more opportunities to search for substitutes or alternatives to the good, which makes them more price sensitive. As a result, the price elasticity of demand for that good is likely to increase.

If People Have More Time to Adjust to a Price