The price elasticity of demand increases with the length of the period to which the demand curve pertains because:
A) consumers' incomes will increase.
B) the demand curve will shift outward.
C) all prices will increase over time.
D) consumers will be better able to find substitutes.

Question

Quizplus · Accepted Answer

As the length of the period increases, consumers will have more time to find substitutes for the product, which will increase the price elasticity of demand. This is because consumers will have more options to choose from and will be more sensitive to price changes.

The Price Elasticity of Demand Increases with the Length of the Period