After full adjustment to a price change has occurred, the absolute price elasticity of demand for an item is equal to 1.5. In the short run, the absolute price elasticity of demand for the item was probably
A) less than 0.
B) greater than 0.
C) less than 1.5.
D) greater than 1.5.

Question

Quizplus · Accepted Answer

In the short run, consumers may not have had enough time to adjust their consumption patterns in response to a price change, leading to a lower absolute price elasticity of demand. Therefore, the absolute price elasticity of demand in the short run is likely less than the fully adjusted elasticity of 1.5.

After Full Adjustment to a Price Change Has Occurred, the Absolute