The long-run price elasticity of demand is usually larger than the short-run price elasticity of demand because:
A) demand curves tend to become steeper over time.
B) economists take the absolute value of long-run price elasticities but not of short-run elasticities.
C) people have more time to find substitute goods.
D) incomes tend to rise over time.

Question

Quizplus · Accepted Answer

In the long run, consumers have more time to adjust their consumption patterns and find substitute goods, making the demand curve more elastic. In the short-run, consumers may not have many alternative options and have to continue purchasing the good at a higher price, making the demand curve less elastic.

The Long-Run Price Elasticity of Demand Is Usually Larger Than