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The Elasticity of Demand and Supply, If the good is a luxury., The longer…
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- The longer the time period.
- The more narrowly defined the market.
- The larger the number of close substitutes.
- Quantity demanded does not respond strongly to price changes.
- Price elasticity of demand is less than one.
- Quantity demanded responds strongly to changes in price.
- Price elasticity of demand is greater than one.
- Quantity demanded does not respond to price changes.
- Quantity demanded changes infinitely with any change in price.
- Quantity demanded changes by the same percentage as the price.
- But ε will still vary with Q and P
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- Beach-front land is inelastic.
- Books, cars, or manufactured goods are elastic.
- Supply is more elastic in the long run.