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Chapter 5: Q. 19 (page 130)

Would you usually expect elasticity of demand or supply to be higher in the short run or in the long run? Why?

Short Answer

Expert verified

Demand is higher in the long run.

Step by step solution

01

Step 1. Definition

The elasticity of demand reflects the change in consumer demand due to the change in the price of the commodity. The elasticity of demand can be influenced due to various factors, including the durability of the good, nature of the good, availability of substitutes etc.

02

Step 2. Explanation

Because it is easier to change quantity demanded in long run than in short run.

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Most popular questions from this chapter

What would the gasoline price elasticity of supply mean to UPS or FedEx?

The equation for a demand curve is P = 48 – 3Q.

What is the elasticity in moving from a quantity of 5 to

a quantity of 6?

When someone’s kidneys fail, the person needs to have medical treatment with a dialysis machine (unless or until they receive a kidney transplant) or they will die. Sketch a supply and demand diagram, paying attention to the appropriate elasticities, to illustrate that the supply of such dialysis machines will primarily determine the price.

If demand is elastic, will shifts in supply have a larger effect on equilibrium quantity or on price?

Can you think of an industry (or product) with

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without limit in response to an increase in the price?
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