If the short-run price elasticity of demand for hospital care is .27, then the long-run price elasticity is expected to be:
A) greater than .27.
B) perfectly inelastic.
C) less than .27.
D) equal to .27.

Question

Quizplus · Accepted Answer

In the long-run, consumers have more time to adjust their behavior and find substitutes for hospital care. Therefore, the price elasticity of demand is expected to be higher in the long-run, making option A the correct choice.

If the Short-Run Price Elasticity of Demand for Hospital Care