The price elasticity of demand increases with the length of the period considered because
A) consumers' incomes will increase over time.
B) the demand curve will shift outward as time passes.
C) all prices will increase over time.
D) consumers will be better able to find substitutes.

Question

Quizplus · Accepted Answer

Over time, consumers are likely to have more options available to substitute for a product if its price increases. This makes them more responsive to changes in price, resulting in a higher price elasticity of demand. The other choices (A, B, and C) are not necessarily true and do not directly explain why the price elasticity of demand would increase with time.

The Price Elasticity of Demand Increases with the Length of the Period