For an increase in demand, the price effect is smallest and the quantity effect is largest
A)when supply is least elastic.
B)in the long run.
C)in the short run.
D)in the immediate market period.

Question

Quizplus · Accepted Answer

In the long run, supply is more elastic, allowing quantity to adjust more significantly to changes in demand, resulting in a larger quantity effect and a smaller price effect.

For an Increase in Demand, the Price Effect Is Smallest