When the Price of a Product Increases, the Passage of Time

question 61

Multiple Choice

When the price of a product increases, the passage of time usually causes the price elasticity of demand for the product to become

• A) less elastic.
• B) more elastic.
• C) smaller and smaller in an absolute value.
• D) approximately equal to zero in the long run because of scarcity.

---

Definitions:

Liquor Sales

The commercial activity of selling alcoholic beverages, including spirits, wines, and beers.

Smoothing Constant

A parameter used in exponential smoothing techniques that determines the weight given to the most recent observation in forecasting.

Exponential Smoothing

A forecasting technique that applies weighted averages of past observations, giving more weight to more recent observations to smooth data.

Liquor Sales

The commercial activity of selling alcoholic beverages, which can include processes such as licensing, distribution, and retailing.