Question

Elasticity of demand is generally high during the long period compared to short period. Why?

Answer 1

Elasticity of demand is generally high during the long period. Because, during the short period, full adjustment in demand (to a change in price) may not be possible owing to rigid consumption habits of the consumers. For example, in response to a substantial increase in price of wine, the consumers may not immediately reduce the consumption of wine. However, they may plan to give up or reduce the consumption of wine gradually over a long period of time.