Suppose that the value of the short-run absolute elasticity of demand for a good is 0.4. Then, we know the long-run absolute price elasticity of demand will be
A) 0.
B) greater than 0.4.
C) elastic.
D) less than 0.4.

Question

Quizplus · Accepted Answer

The long-run absolute price elasticity of demand is typically greater than the short-run elasticity because consumers have more time to adjust their behavior and find substitutes in response to price changes.

Suppose That the Value of the Short-Run Absolute Elasticity of Demand