Which of the following statements is true of the price elasticity of demand?
A) As the number of substitutes for a good increases, the price elasticity of demand for that good decreases.
B) If a consumer's budget share of a good increases, the price elasticity of demand for that good is likely to decrease.
C) The price elasticity of demand for a good is generally higher in the long run than in the short run.
D) If the price elasticity of demand for a good equals zero, the demand for the good is likely to be highly responsive to price changes.

Question

Quizplus · Accepted Answer

The price elasticity of demand tends to be higher in the long run than in the short run because consumers have more time to find substitutes and adjust their consumption habits in response to price changes.

Which of the Following Statements Is True of the Price