How does the amount of time consumers have to adjust to a price change affect elasticity?
A) The more time consumers have to adjust, the less elastic their demand will be.
B) The time consumers have to adjust does not affect the elasticity of their response unless it is a luxury good.
C) The more time consumers have to adjust, the more elastic their demand will be.
D) The time consumers have to adjust will not affect the elasticity of their response unless the good is a necessity.

Question

Quizplus · Accepted Answer

When consumers have more time to adjust to a price change, they have more opportunities to find substitute goods or alternative methods of obtaining the same good at a lower price. This makes their demand more elastic as they are more likely to switch to substitutes or reduce consumption altogether. On the other hand, when consumers have less time to adjust, their demand is less elastic as they are less able to find substitutes or alter their consumption patterns. Therefore, option C is the best choice.

How Does the Amount of Time Consumers Have to Adjust