If E₁ is the demand elasticity for a product after a price change has been in effect one day, E₂ is the demand elasticity for that product after one week, and E₃ is demand elasticity for that product after one month, A) |E₁| |E₂| |E₃| B) |E₂| |E₃| |E₁| C) |E₃| |E₁| |E₂| D) |E₃| |E₂| |E₁|

Question

If E₁ is the demand elasticity for a product after a price change has been in effect one day, E₂ is the demand elasticity for that product after one week, and E₃ is demand elasticity for that product after one month, A) |E₁| > |E₂| > |E₃| B) |E₂| > |E₃| > |E₁| C) |E₃| > |E₁| > |E₂| D) |E₃|> |E₂| > |E₁|

Quizplus · Accepted Answer

Demand elasticity tends to increase over time as consumers have more time to adjust to price changes, so the absolute value of elasticity is likely to be greatest after one month.

If E1 Is the Demand Elasticity for a Product After

If E₁ Is the Demand Elasticity for a Product After