The correct answer is: A. Is more than its short-run value.
Price elasticity of demand is a measure of how responsive consumers are to changes in the price of a good or service. In the short run, consumers have less time to adjust their spending habits, so they may be less responsive to changes in price. In the long run, consumers have more time to adjust their spending habits, so they may be more responsive to changes in price.
For example, if the price of gasoline goes up by 10%, consumers may not be able to immediately change their driving habits. They may still need to drive to work, school, and the grocery store. However, over time, they may be able to find ways to reduce their driving, such as carpooling, taking public transportation, or working from home.
As a result, the price elasticity of demand for gasoline is likely to be higher in the long run than in the short run.
Here is a brief explanation of each option:
- A. Is more than its short-run value. This is the correct answer, as explained above.
- B. Is less than its short-run value. This is incorrect, as consumers are more responsive to changes in price in the long run than in the short run.
- C. Is same as its short-run value. This is incorrect, as consumers are more responsive to changes in price in the long run than in the short run.
- D. None of the above. This is incorrect, as the correct answer is A.