A common determinant of both the price elasticity of demand and the price elasticity of supply for a product is:
A)the availability of close substitutes for the product.
B)the proportion of the consumer's budget spent on the product.
C)the length of the adjustment period considered.
D)the additional cost of increasing production.
E)the availability of substitutes in production for the product.

Question

A common determinant of both the price elasticity of demand and the price elasticity of supply for a product is:​
A)the availability of close substitutes for the product.
B)the proportion of the consumer's budget spent on the product.
C)the length of the adjustment period considered.
D)the additional cost of increasing production.
E)the availability of substitutes in production for the product.

Quizplus · Accepted Answer

The length of the adjustment period considered affects both demand and supply elasticity, as it allows consumers and producers more time to adjust their behavior in response to price changes.

A Common Determinant of Both the Price Elasticity of Demand