Related to the Economics in Practice on page 99: Which of the following best explains why demand is often less elastic in the short run than it is in the long run?
A) When demand is elastic, price increases reduce revenue because a small price increase will lead to a large decrease in quantity demanded.
B) In the short run, consumers have less access to substitutes.
C) Consumers tend to postpone making purchasing decisions as long as possible.
D) In the short run, prices can change rapidly, but in the long run they are more stable.

Question

Quizplus · Accepted Answer

In the short run, consumers have less access to substitutes, which means they are less able to respond to price changes by switching to other products. In the long run, consumers have more time to adjust their consumption patterns and may have access to more substitutes, making demand more elastic.

Related to the Economics in Practice on Page 99: Which