After full adjustment to a price change has occurred, the absolute price elasticity of demand for an item is equal to 1. In the short run, the absolute price elasticity of demand for the item was probably
A) less than 0.
B) greater than 0.
C) less than 1.
D) greater than 1.

Question

Quizplus · Accepted Answer

In the short run, consumers have less time to adjust to price changes, so demand is typically less elastic, meaning the elasticity is likely less than 1.

After Full Adjustment to a Price Change Has Occurred, the Absolute