The Price Elasticity of Demand Increases with the Length of the Period

question 300

Multiple Choice

The price elasticity of demand increases with the length of the period considered because

• A)consumers' incomes will increase over time.
• B)the demand curve will shift outward as time passes.
• C)all prices will increase over time.
• D)consumers will be better able to find substitutes.

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Definitions:

Directly Related

A relationship between two variables in which they move in the same direction.

Consumer's Income

The sum of money a consumer can spend on products and services.

Budget Line

A visual depiction of every potential combination of two products that can be bought within a specific budget at fixed prices.

After-Tax Income

The amount of net income remaining after all taxes (federal, state, local) have been deducted from the gross income.