Question

The longer the time period under study, ________.

1) the more elastic is the price elasticity of demand.
2) the less sensitive consumers will be to price changes.
3) the less adjustment consumers will make to price changes.
4) the more inelastic is the price elasticity of demand.
5) the more likely any given price cut will result in a smaller reaction by the consumer.

Answer 1

The longer the time period under study, the less sensitive consumers will be to price changes.

Step-by-step explanation:

The longer the time period under study, the less sensitive consumers will be to price changes. This means that as time goes on, consumers become less responsive to changes in price. For example, if the price of a product increases, consumers are less likely to reduce their demand for it.

This can be explained by the concept of price elasticity of demand. Price elasticity measures how much the quantity demanded of a product changes in response to a change in its price. When the time period under study is longer, consumers have more time to adjust their behavior and find alternatives to the product at a particular price.

For instance, if the price of a luxury item rises, consumers might be less willing to purchase it in the long run as they have more time to consider other options or alternatives. On the other hand, if the price of a necessity item increases, consumers might be less likely to change their purchasing behavior as they have fewer options or alternatives.