Which of the Following Statements Is True About the Price

question 160

Multiple Choice

Which of the following statements is true about the price elasticity of demand?

• A)It is higher in the short run than in the long run because people's habits change slowly.
• B)It is higher in the long run than the short run because people have more time to find substitute products.
• C)It is the same in the short run and the long run.
• D)It is higher in the short run because markets adjust slowly to changes.

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Definitions:

Equilibrium Price

The price at which the quantity of goods supplied is equal to the quantity of goods demanded in a market.

Equilibrium Quantity

At the market equilibrium price, the amount of goods or services that are supplied matches the amount that is demanded.

Equilibrium Price

The market price at which the quantity demanded of a good equals the quantity supplied, leading to a state of balance in the market.

Government Subsidy

Financial assistance provided by the government to businesses, individuals, or other governmental units in support of an activity deemed beneficial to the public.