question archive If the price of steel increases drastically, the quantity of steel demanded by the building industry will fall significantly over the long run because _____
If the price of steel increases drastically, the quantity of steel demanded by the building industry will fall significantly over the long run because _____
Subject:EconomicsPrice:2.88 Bought3
If the price of steel increases drastically, the quantity of steel demanded by the building industry will fall significantly over the long run because _____.
a. buyers of steel are more sensitive to a price change if they have more time to adjust to the price change
b. sales revenue in the building industry will fall sharply
c. buyers of steel are less sensitive to a price change if they have more time to adjust to the price change
d. profits will fall by a greater amount in the long run than in the short run
Purchase A New Answer
Custom new solution created by our subject matter experts
GET A QUOTE
Answer Preview
If the price of steel increases drastically, the quantity of steel demanded by the building industry will fall significantly over the long run because a. buyers of steel are more sensitive to a price change if they have more time to adjust to the price change
This is the correct answer because in the long run, the consumers have the enough time to switch their demand towards a substitute good to save the consumption cost. With an increase in price of steel, in the short-run the consumers are not able to switch their demand immediately. But, in the long run the consumers have enough time to look over other substitutes for steel. Thus, the demand for steel falls in the long run.
