CFA Practice Question

There are 539 practice questions for this study session.

CFA Practice Question

The passage of time usually ______
A. causes the price elasticity of demand for a good to increase.
B. causes the price elasticity of demand for a good to decrease.
C. has a completely unpredictable effect on the price elasticity of demand for a good.
Explanation: Price elasticity of demand usually increases with time because it often takes time to make the adjustments needed to change spending plans. Consider the time it would take to make all the adjustments you would want to make if the price of gasoline tripled!

User Contributed Comments 1

User Comment
chuong Long run has time to adjustment-> more elastic
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