Question

Demand for a product tends to be more elastic the longer the time period considered because...

Demand for a product tends to be more elastic the longer the time period considered because
A.
the inverse relationship between the price and the quantity demanded weakens over time.
B.
buyers have more time to search for substitutes.
C.
buyers get used to the new price.
D.
sellers have more time to expand production.
E.
price increases over time make the price larger relative to​ buyers' incomes.
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Answer #1

Option B

  • A good is said to have an elastic demand if the demand for that particular good changes even with a small change in price.
  • Time period is a factor that impacts the price elasticity of demand for goods.
  • The greater the time allowed for the consumers to search for the substitutes, the greater is the price elasticity of demand for that good.
  • This is because if the consumers have more time to evaluate a good, they search for a cheaper substitutes of that good when its price increases.
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