Economics · Microeconomics

Which of the following statements regarding elasticity is TRUE?

Verified Solution4 OptionsUpdated: October 2026👁️1 View

1Perfectly competitive firms can vary price based on price elasticity of demand.
2The supply of housing/apartments is more inelastic in the short run compared to the long run.✓
3Cross-price elasticity of demand is always positive for all pairs of goods.
4The price elasticity of demand is constant at all points along a linear downward-sloping demand curve.

Correct answer

The supply of housing/apartments is more inelastic in the short run compared to the long run.

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