Demand for a product tends to be more elastic the longer the time period considered because
A) sellers have more time to expand production.
B) buyers have more time to search for substitutes.
C) price increases over time make the price larger relative to buyers' incomes.
D) the inverse relationship between the price and the quantity demanded weakens over time.
E) buyers get used to the new price.

Question

Quizplus · Accepted Answer

When a buyer has more time, they have the opportunity to search for substitutes or alternative products that they could buy instead. This makes the demand more elastic as buyers have a wider range of options to choose from. In the short-term, buyers may not have enough time to find substitutes, which makes the demand more inelastic.

Demand for a Product Tends to Be More Elastic the Longer