A. greater in the long run than in the short run. B. greater in the short run than in the long run. C. the same in both the short run and the long run. D. greater for "necessities" than it is for "luxuries."
A. The larger an item is in one's budget, the greater the price elasticity of demand.
B. The price elasticity of demand is greater for necessities than it is for luxuries.
C. The larger the number of close substitutes available, the greater will be the price elasticity
of demand for a particular product.
D. The price elasticity of demand is greater the longer the time period under consideration.
Answer: A
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