If People Have More Time to Adjust to a Price

question 208

Multiple Choice

If people have more time to adjust to a price change,

• A)demand becomes more elastic, and supply becomes less elastic
• B)demand becomes less elastic, and supply becomes more elastic
• C)both supply and demand become less elastic
• D)both supply and demand become more elastic
• E)elasticity of both demand and supply tends toward unity

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Definitions:

Marginal Cost

The hike in cost associated with the creation of an additional unit of a product or service.

MUₐ /Pₐ

Represents the ratio of the marginal utility (MU) of a good to its price (P), indicating the additional satisfaction per unit of currency spent on that good.

Product B

A general term used to refer to a second product or an alternative in a list or comparison of goods.