Which of the following statements is true of the price elasticity of demand? OA.

Question

Which of the following statements is true of the price elasticity of demand? OA. If the price elasticity of demand for a good equals zero, the demand for the good is likely to be highly responsive to price change ? B. As the number of substitutes for a good increases, the price elasticity of demand for that good decreases. ° C. If a consumers budget share of a good increases, the price elasticity of demand for that good is likely to decrease. O D. The price elasticity of demand for a good is generally higher in the long run than in the short run Click to select your answer

Explanation / Answer

Answer is D. The Price elasticity of demand for a good is generally higher in the long run than in the short run.

Explanation:

As the consumer gets the time in the long run, he can be able to adjust its demand and able to find more suitable option for demand to be satisfied. Therefore, the demand is more elastic in the long run then in the short run.

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