What will be the effect on price elasticity of demand if the time required to find the substitu...........

Economics (CUET) Consumer Behaviour and Demand

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What will be the effect on price elasticity of demand if the time required to find the substitute product is more.

Price elasticity will increase.

Price elasticity will remain same.

Price elasticity will decrease.

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Explanation:

Option (1) is correct.
Explanation: The price elasticity of demand varies directly with the time period. If the time period required to find the substitute commodity is more, the price elasticity will increase and vice versa. This means the elasticity for a shorter time period is always low or it can be even inelastic.