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Exhibit 5-23

-Refer to Exhibit 5-23. The demand curve that best illustrates how consumers will respond to a change in price over a very long time period is:

Question

NARRBEGIN: Exhibit 5-23
Exhibit 5-23
 
-Refer to Exhibit 5-23. The demand curve that best illustrates how consumers will respond to a change in price over a very long time period is:

Quizplus · Accepted Answer

Curve D(3) represents a relatively flat demand curve, indicating that consumers' response to a change in price over a very long time period is relatively insensitive. Curve D(1) is steeper, indicating that consumers are more sensitive to price changes in the short run, but may become less sensitive over time. Curve D(2) and D(4) are steeper at the beginning and become flatter as the quantity demanded increases, indicating that consumers may be more sensitive to price changes at lower levels of demand, but become less sensitive as the quantity demanded increases over time. Therefore, D(3) is the best choice for the given scenario.

NARRBEGIN: Exhibit 5-23 Exhibit 5-23