Figure 2.5.2
-Refer to Figure 2.5.2 above. Which of the following best represents the demand for cars in the short run (SR) and in the long run (LR)?
A) Panel A.
B) Panel B
C) None of the above. Both are perfectly elastic.
D) None of the above. Both are perfectly inelastic.

Question

Figure 2.5.2
-Refer to Figure 2.5.2 above. Which of the following best represents the demand for cars in the short run (SR) and in the long run (LR)?
A) Panel A. 
B) Panel B 
C) None of the above. Both are perfectly elastic. 
D) None of the above. Both are perfectly inelastic.

Quizplus · Accepted Answer

In the short run, demand for cars is typically more inelastic due to limited substitutes and immediate needs. In the long run, demand becomes more elastic as consumers have more time to adjust their preferences and find alternatives. Panel A likely depicts this scenario.

Figure 2.5.2 -Refer to Figure 2.5.2 Above. Which of the Following Best