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Which of the following statements is​ true?
A. The longer any price change​ persists, the greater the elasticity of demand.
B. The closer the substitutes for a particular commodity and the more substitutes there​ are, the more inelastic will be its price elasticity of demand.
C. The smaller the share of a​ person's total budget that is spent on a​ commodity, the greater that​ person's price elasticity of demand is for that commodity.
D. The demand for necessities is likely to be​ elastic, while the demand for luxuries is likely to be inelastic.

Respuesta :

Answer:

The correct answer is option A.

Explanation:

If a price change persists for a long period, the consumers will be able to adjust to the price change. This will make the demand relatively elastic.

If there are a lot of very close substitutes for a product its demand will be relatively elastic. This is because consumers always prefer a cheaper substitute.

If the share of a product in a person's budget is smaller, a change in the price of that product won't have a greater effect on the budget. This will make the demand for the product relatively elastic.

The demand for necessities is likely to be inelastic because it is a necessary item while the demand for luxuries will be inelastic because their consumption is not necessary.

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