Final answer:
In economics, when transaction prices are volatile but long-term prices are stable, this is referred to as price volatility, not price continuity. Option B is correct.
Step-by-step explanation:
In economics, when transaction prices are volatile but long-term prices are stable, this is referred to as price volatility, not price continuity.
Price continuity would imply a consistent and uninterrupted movement in prices over time, while price volatility suggests that prices are fluctuating and changing rapidly in the short term.
The pattern of prices bouncing up and down more than quantities in the short run, but quantities often moving more than prices in the long run, is due to the inelasticity of supply and demand in the short run and their elasticity in the long run.
This means that shifts in either demand or supply can cause greater changes in prices in the short run, but in the long run, quantity adjusts more easily while prices become more muted.