How Do Consumers Who Are Subject to a Binding Price

question 122

Multiple Choice

How do consumers who are subject to a binding price ceiling respond as the time frame shifts from the short run to the long run?

• A) Consumers are increasingly willing to substitute away from the good,and their elasticity of demand becomes less elastic.
• B) There are no changes,and elasticity remains unchanged.
• C) Consumers are increasingly willing to substitute away from the good,and their elasticity of demand becomes more elastic.
• D) Consumers are less willing to substitute away from the good,and their elasticity of demand becomes less elastic.
• E) Consumers are less willing to substitute away from the good,and their elasticity of demand becomes more elastic.

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Definitions:

Exports of Services

Economic transactions where domestic service providers offer their services to entities in foreign countries.

Exchange Rates

The price at which one currency can be exchanged for another in the foreign exchange market.

Swiss Francs

The currency of Switzerland, known for its stability and often considered a "safe-haven" currency in times of economic uncertainty.

Yen

The official currency of Japan, often symbolized as ¥.