An important determinant of the price elasticity of demand is the:
A) time period.
B) price of related goods.
C) level of technology.
D) quantity of the good supplied.

Question

Quizplus · Accepted Answer

The time period is an important determinant of price elasticity because over time, consumers may have more options to substitute a good with a cheaper alternative, making demand more elastic. In the short run, consumers may not have as many choices, making demand less elastic. Therefore, the longer the time period, the more elastic the demand becomes. The price of related goods (B), level of technology (C), and quantity of the good supplied (D) can also affect the price elasticity of demand, but to a lesser extent than the time period.

An Important Determinant of the Price Elasticity of Demand Is