The amount of time elapsed since a price change impacts on the elasticity of demand because as more time passes,
A) people can find more substitutes and so the elasticity of demand increases.
B) people can find more substitutes and so the elasticity of demand decreases.
C) people's incomes will increase and so the elasticity of demand decreases.
D) the good's price will have a chance to return to its previous level.

Question

Quizplus · Accepted Answer

As more time passes after a price change, consumers have more opportunity to find substitutes for a product, making their demand more sensitive (elastic) to price changes.

The Amount of Time Elapsed Since a Price Change Impacts