CFA Practice Question

CFA Practice Question

For most products, the long-run price elasticity of demand is:
A. less than the short-run price elasticity of demand.
B. more likely to increase than is the short-run price elasticity of demand.
C. greater than the short-run price elasticity of demand.
Explanation: Generally, when the price of a product increases, consumers reduce consumption by a larger amount in the long run than in the short run; this relationship between elasticity and time is referred to as the second law of demand.

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