The long-run price elasticity of demand is usually larger than the short-run price elasticity of demand because:
A) demand curves tend to become steeper over time.
B) economists take the absolute value of long-run price elasticities but not of short-run elasticities.
C) people have more time to find substitute goods.
D) incomes tend to rise over time.
E) supply curves change over time.

Question

Quizplus · Accepted Answer

In the long-run, consumers have more time to adjust their consumption patterns and can find substitute goods, resulting in a greater responsiveness to price changes compared to the short-run. In the short-run, consumers may have limited options and may not be able to find suitable substitutes as quickly, leading to a lower elasticity of demand.

The Long-Run Price Elasticity of Demand Is Usually Larger Than