"The price elasticity of demand for a particular good is smaller in the long run because consumers adapt to higher prices over time." Do you agree or disagree? Explain

What will be an ideal response?


Disagree. Price elasticity of demand is related to a particular good rather than all the goods that individuals may consume. In the long run, consumers can find more substitutes. Thus, the price elasticity of demand of a particular good is actually greater in the long run than in the short run.

Economics

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Which of the following statements is true?

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Economics

The above figure represents a perfectly competitive industry that is taken over by a single firm and operated as a monopoly

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Economics

Hurricane Katrina destroyed oil and natural gas refining capacity in the Gulf of Mexico which subsequently drove up natural gas, gasoline, and heating oil prices

Three years later, once the refining capacity was restored, these prices came back down. The restoration of refining capacity should A) move the economy up along a stationary short-run aggregate supply curve. B) move the economy down along a stationary short-run aggregate supply curve. C) shift the short-run aggregate supply curve to the left. D) shift the short-run aggregate supply curve to the right.

Economics