Demand for a good is most likely to be more elastic when:
the good is a necessity. the adjustment to a price change takes a longer time. a lesser proportion of income is spent on the good. Incorrect.
The more time that has elapsed since a price change, the more elastic the demand. For example, if gas prices rise, consumers cannot quickly change their mode of transportation but will likely do so in the longer run.
CFA Level I
“Demand and Supply Analysis: Introduction,” Richard V. Eastin and Gary L. Arbogast
I don’t get it. Why is b the answer? If it takes longer for people to adjust, then it would be LESS elastic in the short term…