Would you expect a shift in supply to have a greater effect on equilibrium quantity in the short run or in the long run? Explain your answer.
A. A greater effect on equilibrium quantity in the long run because the longer the time period, the more elastic is the good's demand.
B. The same effect on equilibrium quantity in the short run and the long run because when analyzing one good, it is predicted that elasticity does not change.
C. A greater effect on equilibrium quantity in the short run because elasticity is higher the shorter the time period. This would lead consumers to adjust their quantity greatly.
D. A greater effect on equilibrium quantity in the long run because the longer the time period, the greater the increase in income and thus demand.
References
Ans: A. A greater effect on equilibrium quantity in the long run because the longer the time period, the more elastic is the good's demand.
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