Demand for a Product Tends to Be More Elastic the Longer

question 58

Multiple Choice

Demand for a product tends to be more elastic the longer the time period considered because

• A) sellers have more time to expand production.
• B) buyers have more time to search for substitutes.
• C) price increases over time make the price larger relative to buyers' incomes.
• D) the inverse relationship between the price and the quantity demanded weakens over time.
• E) buyers get used to the new price.

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Definitions:

Monopsony Firm

A market situation where there is only one buyer or a dominant buyer for a product or service, giving that buyer substantial control over market prices and terms.

Competitive Firm

A business that operates in a market with many buyers and sellers, where no single entity can significantly influence the market price of goods and services.

Marginal Product

The additional output that results from using one more unit of a particular input, holding all other inputs constant.

Quantity of Land

The total amount of land available for use or development, within a specific area, which can impact agricultural, industrial, and residential development.