The Long-Run Price Elasticity of Demand for a Product Is

question 18

Multiple Choice

The long-run price elasticity of demand for a product is generally ______ the short-run elasticity for the same product.

• A)lower than
• B)equal to
• C)higher than
• D)not comparable to

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Definitions:

Marginal Revenue

The additional profit earned from the sale of an extra unit of a product or service.

Purely Competitive Firm

Describes a business that operates in a market where no single company can influence prices, due to the presence of many sellers offering identical products.

Output

The quantity of goods or services produced in a certain period of time by a person, machine, or industry.

Price Taker

A market participant who has no influence over the market price and must accept the prevailing market price for its products or services.