Asked by Shannon Gibbons on May 28, 2024
Verified
Supply and demand both tend to be more elastic in the long run and more inelastic in the short run.
Elastic
Describes a situation in which the supply or demand for a good or service is highly responsive to changes in price.
Long Run
A period in economic analysis where all factors of production and costs are variable, allowing for full adjustment to changes in the market or economy.
Short Run
A period in economic theory during which at least one factor of production is fixed, limiting the capacity to adjust to changes in market demand.
- Comprehend the long-run and short-run elasticity differences for demand and supply.
Verified Answer
LP
Lewis Patrick-Balamaga Year 7May 28, 2024
Final Answer :
True
Explanation :
In the short run, both consumers and producers have less time to adjust to price changes, making their responses (elasticity) more limited. In the long run, they have more time to find alternatives or adjust their consumption or production habits, leading to greater elasticity.
Learning Objectives
- Comprehend the long-run and short-run elasticity differences for demand and supply.