Question

Consider Figure 19-3. Following a price increase, is the quantity demanded more responsive to the price increase immediately, after an initial passage of time, and then after even more time has passed? Why is this so?

Short answer

Time turns into a significant variable in deciding the elasticity of demand. So the demand turns out to be more versatile with the progression of time.

Step-by-step solution

Given Information

Price elasticity of demand estimates how much the demand for the product changes with one unit change in the cost of the ware.

Explanation

The demand for the item turns out to be more responsive with the progression of time the demand turns out to be more versatile with the progression of time.

Customers find opportunities to conform to changes in cost. They can't promptly improve on their current propensity right away. They set aside some margin to improve on their current propensity. So at first, the demand is inelastic and afterwards steadily with time it becomes inelastic.