According to the textbook, for most goods and services-foods, beverages, entertainment, etc.-the income elasticity of demand is:
A) larger in the long run than in the short run.
B) about the same in the short run and in the long run.
C) larger in the short run than in the long run.
D) is difficult to differentiate from the short run to the long run.

Question

Quizplus · Accepted Answer

For most goods and services, the income elasticity of demand tends to be larger in the long run than in the short run. This is because consumers have more time to adjust their consumption habits in response to changes in their income over the long run.

According to the Textbook, for Most Goods and Services-Foods, Beverages