Financial Planner

Answer: B - In economics, the concept “price elasticity” is defined as a manifestation of a small price change causing a rather large change in the mount purchased. This is common with goods that have many substitutes, for example if the price of Cracker Barrel Cheese rises, consumers will purchase Land O’ Lakes Cheese. Perfect elasticity results in a horizontal demand curve. Time has the greatest effect on elasticity. When the price of the product increases, consumers will reduce their consumption more in the long-run than in the short-run.