How does elasticity change in the long run?

1 Answer
Aug 29, 2015

Answer:

It all depends whether the good is available in the long run.

Explanation:

We shall assume the good is available in the long run also.
Its elasticity depends on so many factors.

Nature of good.

If it is a luxury good. It will have elastic demand.

Availability of substitutes

With more substitutes being introduced into the market in the long run, the said commodity will have elastic demand.

Number of uses

In the long run, new uses may be found for the commodity in question. Then it will have inelastic demand.