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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

In a market where the supply curve is perfectly

inelastic, how does an excise tax affect the price paid by

consumers and the quantity bought and sold?

The equation for a demand curve is P = 2/Q. What

is the elasticity of demand as price falls from 5 to 4?

What is the elasticity of demand as the price falls from 9

to 8? Would you expect these answers to be the same?

A city has built a bridge over a river and it decides

to charge a toll to everyone who crosses. For one year,

the city charges a variety of different tolls and records

information on how many drivers cross the bridge. The

city thus gathers information about elasticity of demand.

If the city wishes to raise as much revenue as possible

from the tolls, where will the city decide to charge a toll:

in the inelastic portion of the demand curve, the elastic

portion of the demand curve, or the unit elastic portion?

Explain.

Describe the general appearance of a demand or a supply curve with infinite elasticity.

Why is the demand curve with constant unitary elasticity concave?
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