When price changes, the effect on quantity demanded is larger as time passes at least partly because
A)people are better able to search out alternatives in the long run.
B)government regulations affect the short run but not the long run.
C)consumers are irrational in the short run.
D)fewer people consume in the long run than in the short run.
E)most consumers do not realize price has changed in the short run.

Question

Quizplus · Accepted Answer

In the long run, consumers have more time to search for substitute products, compare prices, and adjust their behavior accordingly. As a result, they may be more sensitive to changes in price and more likely to switch to a different product or supplier. This is known as price elasticity of demand, which is typically greater in the long run than in the short run.

When Price Changes, the Effect on Quantity Demanded Is Larger