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pearpug279Lv1
28 Sep 2019
When analyzing demand and supply, it is important to distinguish between the short run and the long run. In other words, if we ask how much demand or supply changes in response to a change in price, we must be clear about how much time is allowed to pass before measuring the changes in the quantity demanded or supplied. In general, short-run demand and supply curves look very different from their long-run counterparts. Consider two goods: cars and burgers.
Would you expect the price elasticity of demand for cars to be larger in the short-run or the long-run? Why?
When analyzing demand and supply, it is important to distinguish between the short run and the long run. In other words, if we ask how much demand or supply changes in response to a change in price, we must be clear about how much time is allowed to pass before measuring the changes in the quantity demanded or supplied. In general, short-run demand and supply curves look very different from their long-run counterparts. Consider two goods: cars and burgers.
Would you expect the price elasticity of demand for cars to be larger in the short-run or the long-run? Why?
Insha FatimaLv10
28 Sep 2019
