Related to the Economics in Practice on page 102: 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 fewer opportunities to find and switch to substitute goods or services when prices change, making their demand less elastic. Over time, as consumers become aware of and have access to more alternatives, their demand becomes more elastic since they can more easily switch to substitutes if prices rise.

Related to the Economics in Practice on Page 102: Which