How does increasing the amount of time that a consumer has to purchase a good effect...
How does increasing the amount of time that a consumer has to purchase a good effect the price elasticity of demand for that good. Fully explain. How does increasing the amount of time that a form has to sell a good effect the elasticity of supply? Fully explain.
Homework Answers
The time horizon decides the level of elasticity of demand and supply. If there is a large time horizon or an increasing amount of time, the demand becomes more elastic. Now the consumer has more options or substitutes. The consumer is able to change habits as well. Thus demand is more elastic.
The same logic can be extended to the supply of goods. If there is more time, the seller is able to find out new outlets or consumers or more inputs or technology are available at cheaper rates. Thus, supply becomes more elastic over the long run.
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How does increasing the amount of time that a consumer has to
purchase a good effect...
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2. The amount of a good that buyers are willing and able to buy at a...
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