Introduction to Economics 1 Deneme Sınavı Sorusu #1274737
Which of the following is true regarding the price elasticity of demand?
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The demand for a good is said to be elastic if the percentage change in quantity demanded is smaller than the percentage change in the price of a good. |
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Goods without close substitutes tend to have more elastic demand than goods with close substitutes. |
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Necessity goods tend to have an elastic demand. |
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Goods that represent a relatively small portion of the total budget tend to have elastic demand. |
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Goods tend to have a more elastic demand in the long-run than in the short-run. |
Goods tend to have more elastic demand in the long-run than the short-run because in the long-run availability of substitutes for buyers is higher than the short-run. For example, when the gasoline prices increase by 30% and the car users cannot respond to this price hike by cutting their car use too much in the short-run but in the long-run the consumers can find alternatives by switching to other energy uses.
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