Asked by Ashley Elizabeth on Jun 18, 2024
Verified
The elasticity of demand for a product is likely to be greater,
A) if the product is a necessity, rather than a luxury good.
B) the greater the amount of time over which buyers adjust to a price change.
C) the smaller the proportion of one's income spent on the product.
D) the smaller the number of substitute products available.
Elasticity Of Demand
A measure of how sensitive the quantity demanded of a good is to a change in its price.
Luxury Good
A good for which demand increases more than proportionally as income rises, in contrast to a "necessity good," for which demand is not related to income.
- Analyze the factors affecting price elasticity of demand including time, availability of substitutes, and proportion of income spent on a good.
- Discern the differences in elasticity for demand when comparing short-run to long-run intervals.
Verified Answer
JV
Joaquin VistanJun 19, 2024
Final Answer :
B
Explanation :
The elasticity of demand for a product tends to be greater the more time consumers have to adjust to a price change, as they can find substitutes or alter consumption habits over time.
Learning Objectives
- Analyze the factors affecting price elasticity of demand including time, availability of substitutes, and proportion of income spent on a good.
- Discern the differences in elasticity for demand when comparing short-run to long-run intervals.