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:

Cross-sectional

A research design that collects data from different individuals of different ages or developmental stages at a single point in time.

Longitudinal

A type of study or research design that follows the same subjects over a period of time to observe changes or developments.

Experimental

Pertaining to a method of inquiry in science and psychology involving controlled testing of variables to study effects or outcomes.

Retrospective

An approach or study that looks back at events or experiences from the past.